Klona Company set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's fiscal year). May 1 Prepared a company check for $300 to establish the petty cash fund. May 15 Prepared a company check to replenish the fund for the following expenditures made since May 1. May 15 a. Paid $88 for janitorial expenses. May 15 b. Paid $53.68 for miscellaneous expenses. May 15 c. Paid postage expenses of $53.50. May 15 d. Paid $47.15 to Facebook for advertising expense. May 15 e. Counted $62.15 remaining in the petty cashbox. May 16 Prepared a company check for $200 to increase the fund to $500. May 31 The petty cashier reports that $288.20 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15. May 31 f. Paid postage expenses of $147.36. May 31 g. Reimbursed the office manager for mileage expense, $23.50. May 31 h. Paid $34.75 in delivery expense for products to a customer, terms FOB destination. May 31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $100, leaving a total of $400. Required: Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any Increase or decrease In the fund balance on May 16 and May 31. (Round your answers to 2 decimal places.)
Klona Company set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's fiscal year). May 1 Prepared a company check for $300 to establish the petty cash fund. May 15 Prepared a company check to replenish the fund for the following expenditures made since May 1. May 15 a. Paid $88 for janitorial expenses. May 15 b. Paid $53.68 for miscellaneous expenses. May 15 c. Paid postage expenses of $53.50. May 15 d. Paid $47.15 to Facebook for advertising expense. May 15 e. Counted $62.15 remaining in the petty cashbox. May 16 Prepared a company check for $200 to increase the fund to $500. May 31 The petty cashier reports that $288.20 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15. May 31 f. Paid postage expenses of $147.36. May 31 g. Reimbursed the office manager for mileage expense, $23.50. May 31 h. Paid $34.75 in delivery expense for products to a customer, terms FOB destination. May 31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $100, leaving a total of $400. Required: Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any Increase or decrease In the fund balance on May 16 and May 31. (Round your answers to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Klona Company set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund
occurred in May (the last month of the company's fiscal year).
May 1 Prepared a company check for $300 to establish the petty cash fund.
May 15 Prepared a company check to replenish the fund for the following expenditures made since May 1.
May 15 a. Paid $88 for janitorial expenses.
May 15 b. Paid $53.68 for miscellaneous expenses.
May 15 c. Paid postage expenses of $53.50.
May 15 d. Paid $47.15 to Facebook for advertising expense.
May 15 e. Counted $62.15 remaining in the petty cashbox.
May 16 Prepared a company check for $200 to increase the fund to $500.
May 31
The petty cashier reports that $288.20 cash remains in the fund. A company check is drawn to replenish the fund for the
following expenditures made since May 15.
May 31 f. Paid postage expenses of $147.36.
May 31 g. Reimbursed the office manager for mileage expense, $23.50.
May 31 h. Paid $34.75 in delivery expense for products to a customer, terms FOB destination.
May 31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $100, leaving a total of
$400.
Required:
Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any Increase or decrease
In the fund balance on May 16 and May 31. (Round your answers to 2 decimal places.)
Expert Solution
Step 1
Petty cash is a small amount of cash that is kept on the company premises to pay for minor cash needs. Examples of these payments are office supplies, cards, flowers, and so forth. Petty cash is stored in a petty cash drawer or box near where it is most needed.
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