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EcoMart establishes a $1,050 petty cash fund on May 2. On May 30, the fund shows $326 in cash along with receipts for the following expenditures: transportation-in, $120; postage expenses, $369; and miscellaneous expenses, $240. The petty cashier could not account for a $5 overage in the fund. The company uses the perpetual system in accounting for merchandise inventory.

Prepare the (1) May 2 entry to establish the fund, (2) May 30 entry to reimburse the fund, and (3) June 1 entry to increase the fund to $1,200.

Respuesta :

Answer:

The required entry of the days would be as follows:

                         Debit Credit  

May 2 Petty cash 1050  

                              Cash  1050  

May 30 Merchandise inventory 120  

                  Postage expense 369  

     Miscellaneous expenses 240  

               Cash short and over 9  

                                               Cash  738  

June 1 Petty cash 150  =1200-1050

                                 Cash  150

Explanation:

The required entry of the days would be as follows:

                         Debit Credit  

May 2 Petty cash 1050  

                              Cash  1050  

May 30 Merchandise inventory 120  

                  Postage expense 369  

     Miscellaneous expenses 240  

               Cash short and over 9  

                                               Cash  738  

June 1 Petty cash 150  =1200-1050

                                 Cash  150

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