Question

 Waupaca Company establishes a $440 petty cash fund on September 9. On September 30, the fund shows $167 in cash along with receipts for the following expenditures: transportation-in, $54; postage expenses, $64; and miscellaneous expenses, $144. The petty cashier could not account for a $11 shortage in the fund. The company uses the perpetual system in accounting for merchandise inventory.

 Prepare (1) the September 9 entry to establish the fund, (2) the September 30 entry to reimburse the fund, and (3) an October 1 entry to increase the fund to $495.

Answer 1

Date	General Journal	Debit	Credit
Sept 09	Petty cash	$440
	Cash		$440
	( To establish petty cash fund)
Sept 30	Transportation in	$54
	Postage expense	$64
	Miscellaneous expense	$144
	Cash short and over	$11
	Cash		$273
	( To record expenses
October 1	Petty cash	$55
	Cash		$55
	(To increase petty cash balance)

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