Asked by Myranda Jimenez on Jul 17, 2024
Verified
The petty cash fund of $200 for George Company appeared as follows on December 31 2016: Cash $59.40 Petty cash vouchers Freight in $27.60 Postage 40.00 Balloons for a special occasion 68.00\begin{array}{lr}\text { Cash } &\$ 59.40 \\\text { Petty cash vouchers } & \\\text { Freight in } & \$ 27.60 \\\text { Postage } & 40.00 \\\text { Balloons for a special occasion } & 68.00\end{array} Cash Petty cash vouchers Freight in Postage Balloons for a special occasion $59.40$27.6040.0068.00
Instructions
1. Briefly describe when the petty cash fund should be replenished. Because there is cash on hand is there a need to replenish the fund at year end on December 31? Explain.
2. Prepare in general journal form the entry to replenish the fund.
3. On December 31 the office manager gives instructions to increase the petty cash fund by $50. Make the appropriate journal entry.
Petty Cash Fund
A small amount of cash kept on hand for minor or unexpected expenses.
Replenish
To fill something up again, restoring its level or supply to a former state.
Journal Entry
The recording of financial transactions into the accounting records of a business, typically involving a debit to one account and a credit to another.
- Gain insight into the role and handling of a petty cash fund, detailing the process of setting it up, replenishing, and adjustments.
Verified Answer
BN
Bertide NeptuneJul 23, 2024
Final Answer :
1. Petty cash should be replenished on a periodic basis or when the cash is low. It must be replenished on the balance sheet date so that the expenses represented by the petty cash vouchers can be recorded in the proper accounting period. 2.
Freight-In. 27.60Postage Expense 40.00Miscellaneous Expense 68.00 Cash Over and Short.5.00 Cash140.60\begin{array}{lrr} \text { Freight-In. } &27.60\\ \text {Postage Expense } &40.00\\ \text {Miscellaneous Expense } &68.00\\ \text { Cash Over and Short.} &5.00\\ \text { Cash} &&140.60\\\end{array} Freight-In. Postage Expense Miscellaneous Expense Cash Over and Short. Cash27.6040.0068.005.00140.60
3.
Petty Cash. 50.00 Cash 50.00\begin{array}{lrr} \text { Petty Cash. } &50.00\\ \text { Cash } &&50.00\\\end{array} Petty Cash. Cash 50.0050.00
Freight-In. 27.60Postage Expense 40.00Miscellaneous Expense 68.00 Cash Over and Short.5.00 Cash140.60\begin{array}{lrr} \text { Freight-In. } &27.60\\ \text {Postage Expense } &40.00\\ \text {Miscellaneous Expense } &68.00\\ \text { Cash Over and Short.} &5.00\\ \text { Cash} &&140.60\\\end{array} Freight-In. Postage Expense Miscellaneous Expense Cash Over and Short. Cash27.6040.0068.005.00140.60
3.
Petty Cash. 50.00 Cash 50.00\begin{array}{lrr} \text { Petty Cash. } &50.00\\ \text { Cash } &&50.00\\\end{array} Petty Cash. Cash 50.0050.00
Learning Objectives
- Gain insight into the role and handling of a petty cash fund, detailing the process of setting it up, replenishing, and adjustments.