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QuestionPetty Cash Fund Journalize the necessary entries for each of the following: a. Issued a check to establish a petty cash fund of $1,270\$ 1,270. If an amount box does not require an entry, leave it blank. □\square □\square □\square □\square □\square □\square b. The amount of cash in the petty cash fund is $160\$ 160. Issued a check to replenish the fund, based on the following summary of petty cash receipts: store supplies, $780\$ 780 and miscellaneous selling expense, $280\$ 280. Record any missing funds in the cash short and over account. If an amount box does not require an entry, leave it blank. □\square □\square □\square □\square □\square □\square □\square □\square □\square □\square

Studdy Solution

STEP 1

1. We are tasked with creating journal entries for a petty cash fund.
2. The first entry is to establish the fund, and the second is to replenish it.
3. We need to account for any discrepancies in the cash short and over account.

STEP 2

1. Journalize the entry to establish the petty cash fund.
2. Journalize the entry to replenish the petty cash fund, including accounting for any cash short or over.

STEP 3

To establish the petty cash fund, debit the Petty Cash account and credit the Cash account for the amount of the fund.
Account TitleDebitCreditPetty Cash$1,270Cash$1,270\begin{array}{|c|c|c|} \hline \text{Account Title} & \text{Debit} & \text{Credit} \\ \hline \text{Petty Cash} & \$1,270 & \\ \hline \text{Cash} & & \$1,270 \\ \hline \end{array}

STEP 4

Calculate the total expenses and the cash short or over amount. The total expenses are the sum of store supplies and miscellaneous selling expenses.
Total Expenses=$780+$280=$1,060\text{Total Expenses} = \$780 + \$280 = \$1,060
The amount needed to replenish the fund is the original fund amount minus the remaining cash.
Amount to Replenish=$1,270−$160=$1,110\text{Amount to Replenish} = \$1,270 - \$160 = \$1,110
Calculate the cash short or over amount.
Cash Short/Over=Amount to Replenish−Total Expenses=$1,110−$1,060=$50\text{Cash Short/Over} = \text{Amount to Replenish} - \text{Total Expenses} = \$1,110 - \$1,060 = \$50

STEP 5

Journalize the entry to replenish the petty cash fund, including the cash short or over account.
Account TitleDebitCreditStore Supplies$780Miscellaneous Selling Expense$280Cash Short and Over$50Cash$1,110\begin{array}{|c|c|c|} \hline \text{Account Title} & \text{Debit} & \text{Credit} \\ \hline \text{Store Supplies} & \$780 & \\ \hline \text{Miscellaneous Selling Expense} & \$280 & \\ \hline \text{Cash Short and Over} & \$50 & \\ \hline \text{Cash} & & \$1,110 \\ \hline \end{array}

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