**Creating and Managing a Petty Cash Fund****Scenario:**Palmona Company establishes a $180 petty cash fund on January 1. By January 8, the fund shows $83 in cash after accounting for various expenditures: - Postage: $38 - Transportation-in: $15 - Delivery expenses: $17 - Miscellaneous expenses: $27The company uses the perpetual inventory system.**Tasks:**1. **Initial Setup:** - Prepare the journal entry to establish the fund on January 1.2. **Reimbursing the Fund on January 8:** - Prepare the entry for two scenarios: a. Simply reimbursing the fund. b. Reimbursing and increasing the fund to $230 (two entries required).**Tools:**- **Journal Entry Worksheet:** - A detailed section to enter journal entries. - The worksheet hints on entering debits before credits.---**Worksheet Instructions:**1. **Tab 1: Recording Petty Cash Fund Establishment** - Date: January 01 - Fill in the General Journal with appropriate debit and credit entries.**Graph/Diagram Description:**- **Visual Component:** - The worksheet includes a table with columns titled: Date, General Journal, Debit, and Credit. - Ensure each entry is complete with the necessary financial data in the respective columns.**Note:** Detailed and accurate record-keeping is essential for effective financial management and auditing purposes.

Petty Cash fund is a small amount of cash which is held to meet the small incidental expenses in the…

Palmona Company establishes a $180 petty cash fund on January 1. On January 8, the fund shows $83 in cas the following expenditures: postage, $38; transportation-in, $15; delivery expenses, $17; and miscellaneous ex uses the perpetual system in accounting for merchandise inventory. 1. Prepare the entry to establish the fund on January 1. 2. Prepare the entry to reimburse the fund on January 8 under two separate situations: a. To reimburse the fund. b. To reimburse the fund and increase it to $230. Hint. Make two entries.

Palmona Company establishes a $180 petty cash fund on January 1. On January 8, the fund shows $83 in cas the following expenditures: postage, $38; transportation-in, $15; delivery expenses, $17; and miscellaneous ex uses the perpetual system in accounting for merchandise inventory. 1. Prepare the entry to establish the fund on January 1. 2. Prepare the entry to reimburse the fund on January 8 under two separate situations: a. To reimburse the fund. b. To reimburse the fund and increase it to $230. Hint. Make two entries.

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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