Question

Walker 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 $350 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 $120 for janitorial services. b. Paid $90 for miscellaneous expenses. e. Paid postage expenses of $60. d. Paid $30 to The County Garette (the local newspaper) for an advertisement. e. Counted $64 remaining in the petty cash box. May 16 Prepared a company check for $150 to increase the fund to $500. May 31 The petty cashier reports that $200 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 $169. 9. Reimbursed the office manager for business mileage, $85. h. Paid $28 to deliver merchandise to a customer, terms yo destination. May 31 The company decides that the May 16 Increase in the fund was too large. It reduces the fund by $120, leaving a total of $380. Requirement General Journal Impact on General Ledger Trial Balance income Prepare the journal entries for each of the petty cash transactions. View transaction list View journal entry worksheet No Account Title Credit Date May 01 Debit 350 Petty cash Cash May 15 120 Janitorial expenses Miscellaneous expen Postage expenses Advertising expense Cash < Prev 7 of 7

Answer 1

1.

Date	General Journal	Debit	Credit
May 1	Petty Cash	350
	Cash		350
May 15	Janitorial expense	120
	Miscellaneous expense	90
	Postage expense	60
	Advertising expense	30
	Cash over and short [bal. fig.]		14
	Cash [350-64]		286
May 16	Petty Cash	150
	Cash		150
May 31	Postage expense	169
	Freight expense	85
	Delivery expense	28
	Cash over and short [bal. fig.]	18
	Cash [500-200]		300
May 31	Cash	120
	Petty Cash		120

2.

Transaction	Impact transaction has on income	Amount on increase (decrease)
May 1)	Net income was unchanged	-
May 15)	Net income decreased by:	(286)
May 16	Net income was unchanged	-
May 31	Net income decreased by:	(300)
May 31	Net income was unchanged	-
In total, net income increased (decreased) by		586