Sun Company has decided to use a petty cash fund. Transactions involving this fu

Question

Sun Company has decided to use a petty cash fund. Transactions involving this fund follow:

June 4 Set up a petty cash fund of $ 225.

22 When the fund had a cash amount of $ 31.35, the custodian of the fund was reimbursed for expenditures made, including:

30 The fund was reimbursed to include petty cash items in the financial statement prepared for the fiscal year ending on this date. The fund had the following cash and vouchers before reimbursement:

July 1 The petty cash fund balance is increased to $ 300.

Prepare journal entries for all of these transactions.

Explanation / Answer

Sun Company Journal Entries Date Accounts Title and explanation Debit Credit Jun-04 Petty cash 225.00 Cash 225.00 (Amount given for establishing petty cash) Jun-22 Transportation in 82.50 Postage 27.00 Office Supplies 81.75 Petty Cash 191.25 (Petty cash expenses incurred during the period) Jun-22 Petty Cash 191.25 Cash 191.25 (Reimbursed the petty cash expenses incurred) Jun-30 Employee 15.00 Postage 27.00 Office Supplies 11.10 Petty Cash 53.10 (Petty cash expenses incurred during the period) Jun-30 Petty Cash 53.10 Cash (225.00-174.00) 51.00 Cash Short and Over 2.10 (Petty cash expenses reimbursed. Excess amount transferred to cash short and over) Jul-01 Petty Cash (300.00-225.00) 75.00 Cash 75.00 (To raise petty cash upto $300)

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