Accounting Help

Biscay Bay Boats established a petty cash fund for minor day-to-day expenses.  Following are activities related to this fund.  Prepare the necessary journal entries for petty cash.

(1)

Established a $500 petty cash fund by writing a check to "cash," cashing the check, and placing the proceeds in a petty cash box entrusted to Herman Jones as custodian.

(2)

At the end of the month, the petty cash fund contained remaining cash of $127, and receipts for $65 postage, $123 office supplies, and $180 gasoline for company vehicles.  Herman is not sure why the fund is short $5.  A check payable to cash in the amount of $373 was prepared, and the funds were placed into the box.

(3)

At the end of the next month, the petty cash fund contained remaining cash of $35, and receipts for $265 postage, $160 office supplies, and $40 gasoline for company vehicles.  A check payable to cash in the amount of $715 was prepared, and the funds were placed into the box.  This amount reimburses the fund and increases its balance to $750.

GENERAL JOURNAL

Date

Accounts

Debit

Credit

#1

To establish a $500 petty cash fund

#2

To record expenses and replenishment of petty cash

#3

To record expenses and replenishment/increase to petty cash