On April 2, Granger Sales decides to establish a $360 petty cash fund to relieve the burden on Accounting. Required:

(a) Journalize the establishment of the fund.

(b) On April 10, the petty cash fund has receipts for mail and postage of $34, contributions and donations of $19, meals and entertainment of $112, and $191 in the ending cash balance. Journalize the replenishment of the fund.

(c) On April 11, Granger Sales decides to increase petty cash to $470. Journalize this event.

a) Debit = Petty Cash $360; Credit = Cash = $360

b) Debit Mail and Postages=$34,

Contributions and donations = $19,

Meals and Entertainment = $112,

Cash Over and Shorts=$4

Credit Cash = $169

C) Debit = Petty Cash $110; Credit = Cash $110

Explanation:

a) Journalise the establishment of the fund

April 2 Debit Petty Cash $360

Credit Cash A/C $360

Being the establishment of a petty cash fund

b) Petty Cash Expenditure and Replenishment

April 10 Debit Mail and Postage $34

Debit Contributions and donations $19

Debit Meals and Entertainment $112

Debit Cash Over and Shorts $4

Credit Cash A/c $169

Being the replenishment of Petty Cash fund

Note: The balance of $191 in the ending cash balance means the petty cash already expended $169. However, the addition of Mail, Contributions and Meals = $165, meaning the account is short by $4 and this must be debited as Cash shorts to make up the difference.

c) Increase in Petty Cash to $470

April 11 Debit Petty Cash $110

Credit Cash A/c $110

Being the Increase in Petty Cash account by $110 (from $360 to $470)