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On May 2 Kellie Company has decided to initiate a petty cash fund in the amount of $1,200. Prepare journal entries for the following transactions: A. On July 5, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $125, Supplies $368, Postage Expense $325, Repairs and Maintenance Expense $99, Miscellaneous Expense $259. The cash on hand at this time was $38. B. On June 14, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $425, Supplies $95, Postage Expense $240, Repairs and Maintenance Expense $299, Miscellaneous Expense $77. The cash on hand at this time was $80. C. On June 23, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $251, Supplies $188, Postage Expense $263, Repairs and Maintenance Expense $182, Miscellaneous Expense $203. The cash on hand at this time was $93. D. On June 29, the company determined that the petty cash fund needed to be decreased to $1,000. E. On June 30, the petty cash fund needed replenishment as it was month-end. The following are the receipts: Auto Expense $114, Supplies $75, Postage Expense $50, Repairs and Maintenance Expense $121, Miscellaneous Expense $39. The cash on hand at this time was $603.

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Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
FindFindarrow_forward

Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 8, Problem 2PA
Textbook Problem
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On May 2 Kellie Company has decided to initiate a petty cash fund in the amount of $1,200. Prepare journal entries for the following transactions:

A. On July 5, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $125, Supplies $368, Postage Expense $325, Repairs and Maintenance Expense $99, Miscellaneous Expense $259. The cash on hand at this time was $38.

B. On June 14, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $425, Supplies $95, Postage Expense $240, Repairs and Maintenance Expense $299, Miscellaneous Expense $77. The cash on hand at this time was $80.

C. On June 23, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $251, Supplies $188, Postage Expense $263, Repairs and Maintenance Expense $182, Miscellaneous Expense $203. The cash on hand at this time was $93.

D. On June 29, the company determined that the petty cash fund needed to be decreased to $1,000.

E. On June 30, the petty cash fund needed replenishment as it was month-end. The following are the receipts: Auto Expense $114, Supplies $75, Postage Expense $50, Repairs and Maintenance Expense $121, Miscellaneous Expense $39. The cash on hand at this time was $603.

To determine

(a)

To prepare:

Journal entries for the petty cash transactions.

Introduction:

Petty cash is a fixed amont set aside to meet day-to-day expenses of small values. Petty cash fund is restated to its set amount by replacing cash for the receipts of expenses.

Explanation of Solution

Record replenishment of petty cash fund:

Date Account Debit ($) Credit($)
June, 5 Auto Expense 125
Supplies 368
Postage Expense 325
Repair and Maintenance Expense 99
Miscellaneous Expense 259
Cash 1,176
(To record replenishment of petty cash fund.)

Table (1)

  • Auto Expense is an expense and it is increased by $125. Therefore, Auto Expense is debited with $125.
  • Supplies is an asset and it is increased by $368. Therefore, Supplies is debited with $368.
  • Postage Expense is an expense and it is increased by $325. Therefore, Postage Expense is debited with $325.
  • Repair and Maintenance Expense is an expense and it is increased by $99. Therefore, Repair and Maintenance Expense is debited with $99.
  • Miscellaneous Expense is an expense and it is increased by $259...
To determine

(b)

To prepare:

Journal entries for the petty cash transactions.

To determine

(c)

To prepare:

Journal entries for the petty cash transactions.

To determine

(d)

To prepare:

Journal entries for the petty cash transactions.

To determine

(e)

To prepare:

Journal entries for the petty cash transactions.

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Chapter 8 Solutions

Principles of Accounting Volume 1
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