Ask Question
2 March, 23:20

Paloma Company establishes a $200 petty cash fund on Jan 1. On January 8, the fund shows $107 in cash along with receipts for the following expenditures: postage, $39; transportation-in, $12; delivery expenses, $14; and miscellaneous expenses, $28. Palmona uses the perpetual system in accounting for merchandise inventory.

Prepare journal entries to (1) establish the fund on January 1, (2) reimburse it on January 8, and (3) both reimburse the fund and increase it to $350 on January 8, assuming no entry in part 2. Hint: Make two separate entries for part 3.

+1
Answers (1)
  1. 2 March, 23:32
    0
    (1) establish the fund on January 1,

    Dr Petty cash fund 200 Cr Cash 200

    (2) reimburse it on January 8

    Dr Postage expenses 39 Dr Transportation expenses 12 Dr Delivery expenses 14 Dr Miscellaneous expenses 28 Cr Cash 93

    (3) both reimburse the fund and increase it to $350 on January 8, assuming no entry in part 2.

    Dr Petty cash fund 150 Dr Postage expenses 39 Dr Transportation expenses 12 Dr Delivery expenses 14 Dr Miscellaneous expenses 28 Cr Cash 243

    The only difference between part 2 and 3 is that the Petty cash fund is increased by $150, and cash decreases by $243 instead of $93.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Paloma Company establishes a $200 petty cash fund on Jan 1. On January 8, the fund shows $107 in cash along with receipts for the following ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers