Question

Assume that the custodian of a $450 petty cash fund has $62.50 in coins and currency plus $382.50 in receipts at the end of the month. The entry to replenish the petty cash fund will include:

Answer 1

Answer:

All receipts for petty cash A/c        Dr.  $382.50

Cash over and short A/c                 Dr.  $5

           To Cash A/c $387,50

(Being the replenish the petty cash fund is recorded)

Explanation:

According to the scenario, computation of the given data are as follow:-

We can calculate the total receipts and coins by using following formula:-

Total Receipts and Coin = Coins in Cash Fund + Currency Plus in Receipts  = $62.50 + $382.50

= $445

Shortage of Petty Cash Account is

= Total Receipts and Coin - assume Custodian of a Petty Cash

= $445 - $450

= - $5

Journal Entry:-

All receipts for petty cash A/c        Dr.  $382.50

Cash over and short A/c                 Dr.  $5

           To Cash A/c $387,50

(Being the replenish the petty cash fund is recorded)  

For recording this we debited the petty cash receipts as it increased the assets and credited the cash as it decreased the assets and the balancing is transferred to cash short and over