Journalize the entries in October that pertain to the petty cash fund. Oct 1 - A petty cash fund...

Question:

Journalize the entries in October that pertain to the petty cash fund.

Oct 1 - A petty cash fund is established with a check for $147 issued to the petty cash custodian

Oct 31 - A check was written to reimburse the fund and increase the fund to $197. A count of the petty cash fund disclosed the following items:

Journalize Petty Cash Entries

Many firms establish what are called Petty Cash funds in their offices to pay for very minor routine daily expenses, including for example stamps at the post office; local freight deliveries; purchases of small office supplies at the local office supply store; and the like. This cash fund is kept at what is called an imprest amount under someone's control and responsibility in the office, and then generally monthly, the receipts of payments made from the petty cash fund are recorded in the books, and the petty cash fund is reimbursed back to the imprest amount by a check from the regular bank account.

Answer and Explanation:

Journalize the entries in October that pertain to the petty cash fund.

Oct 1 - A petty cash fund is established with a check for $147 issued to the petty cash custodian

Debit Petty Cash $147

Credit Cash $147

Oct 31 - A check was written to reimburse the fund and increase the fund to $197. A count of the petty cash fund disclosed the following items:

Debit Supplies $24.72

Debit Telephone, Internet, and Fax $15.02

Debit Postage $38.32

Debit Freight Out $5.42

Debit Petty Cash Shortage $2.44

Credit Petty Cash $85.92

Debit Petty Cash ($197 - $147 + $85.92) = $135.92

Credit Cash $135.92

To reimburse Petty Cash fund and increase the Petty Cash fund balance to $197 ($135.92 + Coins $2.08 + Currency $59.00)