Question

Skysong Airline needs to send out one of its employees to Nunavut for three weeks to perform some repairs on some aircraft it owns. Some of the payments to be made for the supplies needed on the assignment will be paid from a petty cash fund. Skysong issued a cheque in the amount of $800.00 to establish the fund. After a few days at the assignment, the employee returned the following receipts along with a report that the fund had $77.15 left in cash. Skysong decided to increase the petty cash fund to $1,000.00.

Receipt		Amount			Description
1		$25.65			Taxi ride from airport to job site
2		43.30			FedEx charges for delivering plane parts
3		35.20			Long distance telephone charges
4		71.55			Supplies
5		335.20			Air freight to ship parts out for overhaul
6		91.80			Supplies
7		45.25			Tarp to protect engine from elements
8		63.00			Grease and oil supplies

Prepare the journal entry to establish the petty cash fund. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit

Prepare the journal entry to replenish the fund. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, e.g. 52.75.)

Account Titles and Explanation	Debit	Credit

Prepare the journal entry to increase the fund to $1,000.00. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit

Answer 1

Requirement 1:

Account title and explanation	Debit	Credit
Petty cash	$800.00
Cash		$800.00
[To open the petty cash fund]

Requirement 2:

Account title and explanation	Debit	Credit
Taxi ride Expense	$25.65
FedEx charges Expense	$43.30
Telephone charges Expense	$35.20
Supplies Expense [71.55+91.80]	$163.35
Freight	$335.20
Tarp Expense	$45.25
Grease and oil supplies Expense	$63.00
Cash short & Over	$11.90
Cash		$722.85
[To replenish the petty cash fund]

Calculations:

Fund balance		$800.00
Cash on hand	$77.15
Total tickets	$710.95	$788.10
Cash short & over		$11.90

Requirement 3:

Account title and explanation	Debit	Credit
Petty cash [1000-800]	$200.00
Cash		$200.00
[To increase the petty cash fund]