Question

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 \)88 for janitorial expenses.

b. Paid \(53.68 for miscellaneous expenses.

c. Paid postage expenses of \)53.50.

d. Paid \(47.15 to The County Gazette (the local newspaper) for advertising expense.

e. Counted \)62.15 remaining in the petty cashbox.

16 Prepared a company check for \(200 to increase the fund to \)500.

31 The petty cashier reports that \(288.20 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 \)147.36.

g. Reimbursed the office manager for mileage expense, \(23.50.

h. Paid \)34.75 in delivery expense for products 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 \(100, leaving a total of \)400.

Required

1. Prepare journal entries (in dollars and cents) 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.

Short answer

Total expenditure, including cash short, is $233.37, and reimbursed petty cash is $211.8.

Step-by-step solution

Introduction to topic

Journals- A journal is a book where every financial nature transaction of a business is recorded in chronological order.

Journals-

Date	Transactions	Debit($)	Credit($)
May 1	Petty Cash	300.00
	Cash		300.00
	To establish the petty cash fund.
May 15	Janitorial Expenses	88.00
	Miscellaneous Expenses	53.68
	Postage Expenses	53.50
	Advertising Expense	47.15
	Cash Over and Short		4.48
	Cash		233.37
	To reimburse the petty cash fund.
May 16	Petty Cash	200.00
	Cash		200.00
	To increase the petty cash fund.
May 31	Postage Expenses	147.36
	Mileage Expense	23.50
	Delivery Expense	34.75
	Cash Over and Short	6.19
	Cash		211.8
	To reimburse the petty cash fund.
May 31	Cash	100.00
	Petty Cash		100.00
	To decrease the petty cash fund.