Question

Windsor, Inc. decided to establish a petty cash fund to help ensure internal control over its small cash expenditures. The following information is available for the month of April.1. On April 1, it established a petty cash fund in the amount of $264.2. A summary of the petty cash expenditures made by the petty cash custodian as of April 10 is as follows. Delivery charges paid on merchandise purchased $75 Supplies purchased and used 40 Postage expense 48 I.O.U. from employees 32 Miscellaneous expense 51 The petty cash fund was replenished on April 10. The balance in the fund was $15.3. T The petty cash fund balance was increased $115 to $379 on April 20. Required : Prepare the journal entries to record transactions related to petty cash for the month of April.

Answer 1

Answer:

Explanation:

The journal entries are shown below:

1. Petty cash A/c Dr $264.2

       To Cash A/c              $264.2

(Being petty cash fund established)

2. Freight - in expense A/c Dr $75

   Supplies expense A/c Dr $40

   Postage expense A/c Dr $48

   Loan to employees A/c Dr $32

   Miscellaneous expense A/c Dr $51

   Cash over and short A/c Dr $2.9

                                            To Cash A/c Dr $248.9         ($264.2 - $15.3)  

(Being disbursement of cash recorded)

3. Petty Cash A/c Dr $115

          To Cash A/c          $115

(Being increase in petty cash recorded)