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Q4TI

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 393

Short Answer

The following petty cash transactions of Green Golf Equipment occurred in May:

May 1 Established a petty cash fund with a $200 balance.

31 The petty cash fund has $18 in cash and $180 in petty cash tickets that were issued to pay for Office Supplies ($81), Delivery Expense ($36), Postage Expense ($54), and Miscellaneous Expense ($9).

The petty cash custodian replenished the fund and recorded the expenses.

Prepare the journal entries.

The petty cash fund account is debited with $200, and the cash account is credited with $200.

See the step by step solution

Step by Step Solution

Step 1: Definition of petty cash fund

The petty cash fund is a fund that is created to meet small expenses.

Step 2: Journal entries

Date

Particulars

Debit

Credit

May 1

Petty Cash Fund

$200

Cash

$200

(Being to for establishment of petty cash fund)

May 1

Office Supplies

$81

Delivery Expense

$36

Postage Expenses

$54

Miscellaneous Expense

$9

Cash Short & Over

$2

Cash

$182

(Entry for the replenishment of petty cash fund

The first entry is passed on recording the establishment of the petty cash fund.

The second entry is passed for the replenishment of the petty cash fund.

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