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On April 2, Granger Sales decides to establish a [tex]$\$[/tex]320[tex]$ petty cash fund to relieve the burden on Accounting.

a. Journalize the establishment of the fund. If an amount box does not require an entry, leave it blank.

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b. On April 10, the petty cash fund has receipts for mail and postage of $[/tex]\[tex]$61$[/tex], contributions and donations of [tex]$\$[/tex]19[tex]$, and meal hand is $[/tex]\[tex]$138$[/tex]. Journalize the replenishment of the fund. Record any missing funds in the cash short and over account. If an amount box does not require an entry, leave it blank.

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Answer :

GinnyAnswer
Let's break it down step by step:

### Part (a): Journalizing the establishment of the fund on April 2

When Granger Sales establishes a petty cash fund, the company needs to move funds from the general cash account into the petty cash account. This movement involves:

1. Debiting the Petty Cash account.
2. Crediting the Cash account.

The amount involved is [tex]$320. Here is the journal entry: Date | Account | Debit | Credit ---------|-----------------------|-----------|----------- April 2 | Petty Cash | 320 | | Cash | | 320 ### Part (b): Journalizing the replenishment of the fund on April 10 On April 10, we are given receipts for several expenses. These expenses need to be recorded, and the petty cash fund needs to be replenished. The steps involve: 1. Debiting various expense accounts based on the receipts. 2. Debiting the Cash Short and Over account if there are any missing funds. 3. Crediting the Cash account since the cash will be used to replenish the fund. The receipts provided are: - Mail and Postage: $[/tex]61
- Contributions and Donations: [tex]$19 - Meal Hand: $[/tex]138

We need to find the total receipts and determine if there are any missing funds.

Total receipts:
[tex]\[ 61 + 19 + 138 = 218 \][/tex]

The established petty cash fund is [tex]$320. The difference (missing funds) is: \[ 320 - 218 = 102 \] This $[/tex]102 difference will be attributed to the Cash Short and Over account.

Here is the journal entry:

Date | Account | Debit | Credit
---------|-------------------------------|-----------|-----------
April 10 | Mail and Postage | 61 |
| Contributions and Donations | 19 |
| Meal Hand | 138 |
| Cash Short and Over | 102 |
| Cash | | 320

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