Question

The James company wants you to establish a petty cash find and replenish it at the end of the month.
You are provided with the following:
02-Jul		$100 petty cash fund is established
31-Jul		Theses vouchers existed
			Donations		$     20.00
			Postage		$     18.00
			Supplies		$     25.00
			Miscellaneous		$     25.00
There was $15.00 remaining in the fund on July 31
Required:
Record the entry to create the fund, and to replenish it, then one to increase the fund by $50
Date								Debit	Credit
01-Jul
31-Jul
31-Jul

Answer 1

Journal Entries:

Date	Pariculars	Debit	Credit
02/07/20X0	Petty Cash	$100
	Cash		$100
(To establish a petty cash fund)
31/07/20X0	Donations	$20
	Postage	$18
	Supplies	$25
	Miscellaneous	$25
	Cash Short and Over*		$3
	Cash		$85
(To replenish a petty cash fund)
31/07/20X0	Petty Cash	$50
	Cash		$50
(To increase a petty cash fund)

* The Cash Over and Short account will be used to balance the entry when the cash needed to get back to the petty cash account does not match the total of petty cash vouchers. In the given case total expense was $88, that means balance in petty cash should have been $12 ($100-$88) but in actual it was $85. Therefore, diferrence of $3 is credited to cash short and over account

.