## Establishing and Adjusting a Petty Cash Fund### Scenario:Granger Sales is managing its petty cash fund through a series of financial events aimed at maintaining efficient and orderly accounting processes. These events involve establishing the fund, replenishing it based on expenditures, and adjusting its overall amount.### Instructions:1. **Establishment of the Petty Cash Fund:** On April 2, Granger Sales decides to establish a $370 petty cash fund to relieve the burden on Accounting. **Journal Entry:** ``` Apr. 2 [Debit Account: Petty Cash] $370 [Credit Account: Cash] $370 ```2. **Replenishment of the Petty Cash Fund:** On April 10, the petty cash fund has receipts for various expenses totaling $151, with $219 remaining in cash. Detailed expenses recorded are: - Mail and postage: $40 - Contributions and donations: $13 - Meals and entertainment: $94 The total replenishment needed to bring the petty cash fund back to $370 is $151 ($370 - $219). **Journal Entry:** ``` Apr. 10 [Debit Account: Mail and Postage Expense] $40 [Debit Account: Contributions and Donations Expense] $13 [Debit Account: Meals and Entertainment Expense] $94 [Credit Account: Cash] $147 ``` 3. **Increase of the Petty Cash Fund:** On April 11, Granger Sales decides to increase the petty cash fund to $430. **Journal Entry:** ``` Apr. 11 [Debit Account: Petty Cash] $60 [Credit Account: Cash] $60 ```### Conclusion:Keeping the petty cash fund balanced and appropriately accounted for is crucial for maintaining financial transparency and convenience for small, frequent expenses. From establishment to periodic replenishment and adjusting its amount, each entry in the journal ensures the petty cash fund is managed effectively.**Notes:**- This practice is crucial for companies with frequent, small, and miscellaneous expenditures.- Always ensure the correct accounts are debited and credited during these transactions.- Regular audits of the petty cash fund can prevent discrepancies and improve accuracy.

Date particulars amount amount Apr 2 petty cadh $370 Cash $370 Being cash paid…

On April 2, Granger Sales decides to establish a $370 petty cash fund to relieve the burden on Accounting. a. Journalize the establishment of the fund. If an amount box does not require an entry, leave it blank. Apr. 2 b. On April 10, the petty cash fund has receipts for mail and postage of $40, contributions and donations of $13, and meals and entertainment of $94, and $219 in cash. Journalize the replenishment of the fund. If an amount box does not require an entry, leave it blank. Apr. 10 c. On April 11, Granger Sales decides to increase petty cash to $430. Journalize this event. If an amount box does not require an entry, leave it blank. Apr. 11

On April 2, Granger Sales decides to establish a $370 petty cash fund to relieve the burden on Accounting. a. Journalize the establishment of the fund. If an amount box does not require an entry, leave it blank. Apr. 2 b. On April 10, the petty cash fund has receipts for mail and postage of $40, contributions and donations of $13, and meals and entertainment of $94, and $219 in cash. Journalize the replenishment of the fund. If an amount box does not require an entry, leave it blank. Apr. 10 c. On April 11, Granger Sales decides to increase petty cash to $430. Journalize this event. If an amount box does not require an entry, leave it blank. Apr. 11

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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