Question

Petty Cash Problem On September 6, Trimen Industries decided to employ a Petty Cash fund for small expenses. A check of $ 150 was issued and cashed by the fund custodian. The $ 150 cash was given to the fund custodian. The custodian was instructed to to obtain docu- mentation for all payments. Petty Cash was to be replenished when the balance in the cash box fell below $ 25. Directions: record the following transactions... (a) Record the the establishment of the fund on Sept. 6... Debit Credit Date Sep. 6 Account Title Petty Cash Cash (b) On September 25, this summary was prepared: UPS Delivery 51.00 Stationery 35.00 Postage due 17.00 floor waxing 30.00 Balance in cash box 7.00 Debit Credit Date Sep. 25 Account Title Delivery Expense Office Supplies Expense Maintenance Expense Postage Expense Cash Short & Over Cash C-On September 27, it was decided to increase the amount of the petty cash fund from $ 150 to $ 200. A check for $ 50 was issued. Debit Credit Date Sep. 27 Account Title Petty Cash Cash 10 points

Answer 1

Following will be the Journal Entries that will be recorded:

Date Particulars Debit Credit Sep.06 Petty Cash $150 Cash $150 (To establish a petty cash fund) Sep. 25 UPS Delivery Stationery Postage Due Floor Waxing Cash Short and Over Cash (To replenish a petty cash fund) $51 $35 $17 $30 $10 $143

* As the balance in the petty fund after above expenses is $7, that means $143 ($150-$7) is expensed out. But in actual only $133 ($51+$35+$17+$30) is expensed. Therefore $10 ($143 - $133) is the difference to be debited in Cash Short and over account.

$50 Sep. 25 Petty Cash Cash (To increase a petty cash fund) $50