Palmona Co. establishes a $290 petty cash fund on January 1. On January 8, the fund shows $189 in cash along with receipts for the following expenditures: postage, $42; transportation-in, $13; delivery expenses, $15; and miscellaneous expenses, $31. 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 $340 on January 8, assuming no entry in part 2. Hint: Make two separate entries for part 3.
Palmona Co. establishes a $290 petty cash fund on January 1. On January 8, the fund shows $189 in cash along with receipts for the following expenditures: postage, $42; transportation-in, $13; delivery expenses, $15; and miscellaneous expenses, $31. 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 $340 on January 8, assuming no entry in part 2. Hint: Make two separate entries for part 3.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
How to increase petty cash? Provide an explanation.
Transcribed Image Text:Exercise 6-10 Petty cash fund accounting LO P2
Palmona Co. establishes a $290 petty cash fund on January 1. On January 8, the fund shows $189 in cash along with receipts for the
following expenditures: postage, $42; transportation-in, $13; delivery expenses, $15; and miscellaneous expenses, $31. 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 $340 on January 8, assuming no entry in part 2. Hint: Make two separate entries for part 3.
Transcribed Image Text:Record the increase of the petty cash fund.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
Jan 08
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