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Palmona Co. establishes a $290 petty cash fund on January 1. On January 8, the fund shows $189 in cash along with receipts for the following expenditures: postage, $42; transportation-in, $13; delivery expenses, $15; and miscellaneous expenses, $31. Palmona uses the perpetual system in accounting for merchandise inventory. Prepare journal entries to (1) establish the fund on January 1, (2) reimburse it on January 8, and (3) both reimburse the fund and increase it to $340 on January 8, assuming no entry in part 2. Hint: Make two separate entries for part 3.

Palmona Co. establishes a $290 petty cash fund on January 1. On January 8, the fund shows $189 in cash along with receipts for the following expenditures: postage, $42; transportation-in, $13; delivery expenses, $15; and miscellaneous expenses, $31. Palmona uses the perpetual system in accounting for merchandise inventory. Prepare journal entries to (1) establish the fund on January 1, (2) reimburse it on January 8, and (3) both reimburse the fund and increase it to $340 on January 8, assuming no entry in part 2. Hint: Make two separate entries for part 3.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 20E
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How to increase petty cash? Provide an explanation. 

Exercise 6-10 Petty cash fund accounting LO P2 Palmona Co. establishes a $290 petty cash fund on January 1. On January 8, the fund shows $189 in cash along with receipts for the following expenditures: postage, $42; transportation-in, $13; delivery expenses, $15; and miscellaneous expenses, $31. Palmona uses the perpetual system in accounting for merchandise inventory. Prepare journal entries to (1) establish the fund on January 1, (2) reimburse it on January 8, and (3) both reimburse the fund and increase it to $340 on January 8, assuming no entry in part 2. Hint: Make two separate entries for part 3.
Transcribed Image Text:Exercise 6-10 Petty cash fund accounting LO P2 Palmona Co. establishes a $290 petty cash fund on January 1. On January 8, the fund shows $189 in cash along with receipts for the following expenditures: postage, $42; transportation-in, $13; delivery expenses, $15; and miscellaneous expenses, $31. Palmona uses the perpetual system in accounting for merchandise inventory. Prepare journal entries to (1) establish the fund on January 1, (2) reimburse it on January 8, and (3) both reimburse the fund and increase it to $340 on January 8, assuming no entry in part 2. Hint: Make two separate entries for part 3.
Record the increase of the petty cash fund. Note: Enter debits before credits. Date General Journal Debit Credit Jan 08
Transcribed Image Text:Record the increase of the petty cash fund. Note: Enter debits before credits. Date General Journal Debit Credit Jan 08
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