Question

Mitchell Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May. May 1 Prepared a company check for $550 to establish the petty cash fund. May 15 Prepared a company check to replenish the fund for the following expenditures made since May 1. a. Paid $194 for janitorial services. b. Paid $145 for miscellaneous expenses. c. Paid postage expenses of $97. d. Paid $48 to Facebook for advertising expense. e. Counted $77 remaining in the petty cash box. May 16 Prepared a company check for $250 to increase the fund to $800. May 31 The petty cashier reports that $320 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15. f. Paid postage expenses of $280. g. Reimbursed the office manager for business mileage, $140. h. Paid $46 to deliver merchandise to a customer, terms FOB destination. May 31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $200, leaving a total of $600.

Answer 1

Transactions	Impact transaction has on income	Amount of increase (decrease)
May 1) Prepared a company check for $550 to establish the petty cash fund.	No Effect	$                          -
May 15) Prepared a company check to replenish the fund for the following expenditures made since May 1: $194 for janitorial services, $145 for miscellaneous expenses, postage expenses of $97, $48 to Facebook for advertising expense. Counted $77 remaining in the petty cash box.	Decrease	$                      -484
May 16 Prepared a company check for $250 to increase the fund to $800	No Effect	$                          -
May 31 The petty cashier reports that $320 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15: postage expenses of $280, business mileage $140, $46 to deliver merchandise to a customer, terms FOB destination	Decrease	$                      -466
May 31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $200, leaving a total of $600.	No Effect	$                          -
In total, net income increased (decreased) by		$                               -950