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Palmona Company establishes a $200 petty cash fund on January 1. On January 8, the fund shows $38 in cash along with receipts for the following expenditures: postage, $74; transportation-in, $29; delivery expenses, $16; and miscellaneous expenses, $43. Palmona 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 $450. Hint: Make two entries. View transaction list " No 1 2 3 View journal entry worksheet Date January 01 January 08 January 08 General Journal Petty cash Cash Postage expense Merchandise inventory Delivery expense Miscellaneous expenses Cash Petty cash Cash Debit 200 7827 74 29 16 43 250 Credit 200 162 250

Palmona Company establishes a $200 petty cash fund on January 1. On January 8, the fund shows $38 in cash along with receipts for the following expenditures: postage, $74; transportation-in, $29; delivery expenses, $16; and miscellaneous expenses, $43. Palmona 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 $450. Hint: Make two entries. View transaction list " No 1 2 3 View journal entry worksheet Date January 01 January 08 January 08 General Journal Petty cash Cash Postage expense Merchandise inventory Delivery expense Miscellaneous expenses Cash Petty cash Cash Debit 200 7827 74 29 16 43 250 Credit 200 162 250

FINANCIAL ACCOUNTING
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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Palmona Company establishes a $200 petty cash fund on January 1. On January 8, the fund shows $38 in cash along with receipts for the following expenditures: postage, $74; transportation-in, $29; delivery expenses, $16; and miscellaneous expenses, $43. Palmona 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 $450. Hint: Make two entries. View transaction list 2 No 1 2 3 View journal entry worksheet Date January 01 January 08 January 08 General Journal Petty cash Cash Postage expense Merchandise inventory Delivery expense Miscellaneous expenses Cash Petty cash Cash Debit 200 2827 74 29 16 43 250 Credit 200 162 250
Transcribed Image Text:Palmona Company establishes a $200 petty cash fund on January 1. On January 8, the fund shows $38 in cash along with receipts for the following expenditures: postage, $74; transportation-in, $29; delivery expenses, $16; and miscellaneous expenses, $43. Palmona 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 $450. Hint: Make two entries. View transaction list 2 No 1 2 3 View journal entry worksheet Date January 01 January 08 January 08 General Journal Petty cash Cash Postage expense Merchandise inventory Delivery expense Miscellaneous expenses Cash Petty cash Cash Debit 200 2827 74 29 16 43 250 Credit 200 162 250
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