Journalize and post petty cash fund transactions . (LO 2) Forney Company maintai
ID: 2487877 • Letter: J
Question
Journalize and post petty cash fund transactions.
(LO 2)
Forney Company maintains a petty cash fund for small expenditures. The following transactions occurred over a 2-month period.
Instructions
(a)
Journalize the petty cash transactions.
July 15, Cash short $3.80
(b)
Post to the Petty Cash account.
Aug. 31 balance $300
(c)
What internal control features exist in a petty cash fund?
July 1 Established petty cash fund by writing a check on Scranton Bank for $200. 15 Replenished the petty cash fund by writing a check for $196.00. On this date the fund consisted of $4.00 in cash and the following petty cash receipts: freight-out $92.00, postage expense $42.40, entertainment expense $46.60, and miscellaneous expense $11.20. 31 Replenished the petty cash fund by writing a check for $192.00. At this date, the fund consisted of $8.00 in cash and the following petty cash receipts: freight-out $82.10, charitable contributions expense $45.00, postage expense $25.50, and miscellaneous expense $39.40. Aug. 15 Replenished the petty cash fund by writing a check for $187.00. On this date, the fund consisted of $13.00 in cash and the following petty cash receipts: freight-out $77.60, entertainment expense $43.00, postage expense $33.00, and miscellaneous expense $37.00. 16 Increased the amount of the petty cash fund to $300 by writing a check for $100. 31 Replenished the petty cash fund by writing a check for $284.00. On this date, the fund consisted of $16 in cash and the following petty cash receipts: postage expense $140.00, travel expense $95.60, and freight-out $47.10.Explanation / Answer
July 1 Petty Cash Fund Dr. $ 200
Scranton Bank Cr. $ 200
(Being writing a check on scranton bank towards established petty cash fund.)
July 15 Freight-out Dr. $ 92.00
Postage Expenses Dr. $ 42.40
Entertainment Expenses Dr. $ 46.60
Miscellaneous Expenses Dr. $11.20
Cash Short Dr. $ 3.80
To Cash Cr. $ 196.00
( Being items debited for which petty cash was withdrwan & cash short )
July 31 Freight-Out Dr. $ 82.10
Charitable Contribution Expenses Dr. $ 45.00
Postage Expenses Dr. $ 25.50
Miscellaneous Expenses Dr. $ 39.40
To Cash Cr. $ 192.00
( Being items debited for which petty cash was withdrawn.)
Aug. 15 Freight-out Dr. $ 77.60
Entertainment Expenses Dr. $ 43.00
Postage Expenses Dr. $ 33.00
Miscellaneous Expenses Dr. $ 37.00
To Cash Cr. $ 190.60
(Being items debited for which petty cash waswithdrwan.)
Aug. 16 Petty cash Fund Dr. $ 100.00
To Scranton Bank Cr. $ 100.00
( Being petty cash fund increases by writing a check on scranton bank.)
Aug.31 Postage Expenses Dr. $ 140.00
Travel Expenses Dr. $ 95.60
Freight-out Dr. $ 47.10
Cash Balance Dr. $ 17.30
To Cash Cr. $ 300.00
( Being items debited for petty cash was withdrrawn)
(c) Internal control over cash is to keep a close watch over any amount of cash that are short or over.
it is the main features.
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