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Kiona Co. set up a petty cash fund for payments of small amounts. The following transactions...

Kiona Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's fiscal year).

  

May 1 Prepared a company check for $300 to establish the petty cash fund.
15

Prepared a company check to replenish the fund for the following expenditures made since May 1.
a.    Paid $93.60 for janitorial services.
b.    Paid $76.41 for miscellaneous expenses.
c.    Paid postage expenses of $52.20.
d.    Paid $68.58 to The County Gazette (the local newspaper) for an advertisement.
e.    Counted $23.01 remaining in the petty cash box.
16

Prepared a company check for $200 to increase the fund to $500.
31

The petty cashier reports that $329.32 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15.
f.     Paid postage expenses of $53.73.

g.    Reimbursed the office manager for business mileage, $42.78.

h.    Paid $44.17 to deliver merchandise to a customer, terms FOB destination.
31

The company decides that the May 16 increase in the fund was too large. It reduces the fund by $50, leaving a total of $450.

  

Required:
1.

Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any increase or decrease in the fund balance on May 16 and May 31. (Round your answers to 2 decimal places.)

Journal entry worksheet

Prepared a company check for $300 to establish the petty cash fund.

Note: Enter debits before credits.
Date General Journal Debit Credit
May 01

     

Solutions

Expert Solution

Journal Entries In the Books of Kiona Co

May 01

Dr     Petty cash                       $300

Cr      Cash $300

May 15

Dr     Janitorial expenses                  $93.60

Dr     Miscellaneous expenses $76.41

Dr     Postage expenses $52.20

Dr     Advertising expense $68.58

Cr      Cash over and short $13.80

Cr      Cash $276.99

*$276.99 = $300 - $23.01

**$13.80 = $276.99 – ($93.60+$76.41+$52.20+$68.58)

May 16

Dr     Petty cash                      $200

Cr      Cash $200

May 31

Dr     Postage expenses           $53.73

Dr     Mileage expense             $42.78

Dr     Delivery expense $44.17

Dr     Cash over and short $30

Cr      Cash $170.68

*$170.68 = $500 - $329.32

**170.68 – ($53.73+$42.78-$44.17)

May 31

Dr     Cash                              50.00

Cr      Petty cash 50.00

ekkarill92 answered 1 year ago
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