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Intermediate Accounting: Reporting...
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Intermediate Accounting: Reporting...
Petty Cash Transactions (Appendix 6.1) Crown Company established a petty cash fund of $600 for incidental expenditures on January 2, 2019. At the end of the month, the count of cash on hand indicated that $57.35 remained in the fund. A sorting of petty cash vouchers disclosed that the following expenses had been incurred during the month, and the fund was replenished.
Required:
Prepare the journal entries necessary to record Crown’s petty cash transactions during January.
Prepare journal entries to record the petty cash transactions.
Petty cash fund:
Petty cash fund is a fund established to pay insignificant amounts like postage, office supplies, and lunches
Prepare journal entries to record the petty cash transactions.
| Date | Account Titles and explanation | Debit ($) | Credit ($) |
| January 2 | Petty cash | 600 | Â |
| Â | Â Â Â Â Cash | Â | 600 |
|  | (To establish the petty cash fund) |  |  |
Table (1)
- Petty cash is an asset and there is an increase in the value of an asset. Hence, debit the cash by $600.
- Cash is an asset and there is a decrease in the value of an asset. Hence, credit the cash by $600.
| Date | Account Titles and explanation | Debit ($) | Credit ($) |
| January 31 | Postage expense | 250.40 | Â |
| Â | Office supplies expense | 165.90 | Â |
| Â | Miscellaneous expense | 119.05 | Â |
| Â | Cash short and over (2) | 7.30 | Â |
| Â | Â Â Â Â Cash | Â | 542.65 |
| Â | (To replenish petty cash fund ) | Â | Â |
Table (2)
- Postage expense is component of stockholder’s equity and there is an increase in the value of expense...
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