Answer:
1. Debit Petty cash for $400; and Credit Cash for $400.
2. Total petty cash payment = $270.57
3(a) Cash reimbursement is $279.58; and Cash over and short is $9.01.
3(b) Debit Petty cash for $100; and Credit Cash for $100.
Step-by-step explanation:
Note: This question is not complete. The full complete question is therefore provided before answering the question. See the attached pdf file for the full question.
The explanations to the answers are now given as follows:
1. Prepare the journal entry to establish the petty cash fund.
Note: See the journal entry in the attached excel file
2. Prepare a petty cash payments report for February with these categories: delivery expense, mileage expense, postage expense, merchandise inventory (for transportation-in), and office supplies expense. Sort the payments into the appropriate categories and total the expenditures in each category.
Note: See the petty cash payments report in the attached excel file.
3. Prepare the journal entries for required 2 to both (a) reimburse and (b) increase the fund amount.
Note: See the journal entries (a) and (b) in the attached excel file
3(a) Reimburse Workings:
w.1: Calculation of Cash reimbursement
Cash reimbursement = Petty cash fund - Petty cash fund balance = $400 - $120.42 = $279.58
w.2: Calculation of the Cash over and short
Cash over and short = Cash reimbursement – Total expenses = $279.58 - $270.57 - $120.42 = $9.01
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