Waupaca company establishes a $350 petty cash fund on september 9. on september 30, the fund shows $104 in cash along with receipts for the following expenditures: transportation costs of merchandise purchased, $40; postage expenses, $123; and miscellaneous expenses, $80. the petty cashier could not account for a $3 shortage in the fund. the company uses the perpetual system in accounting for merchandise inventory. prepare (1) the september 9 entry to establish the fund, (2) the september 30 entry to reimburse the fund, and (3) an october 1 entry to increase the fund to $400.

The format of journal entries is standard. The right date, the general ledger balances, the face value) to be deducted, the face value) to be credited, a summary of the transaction, and a unique identification number, such as a check number, are all included in a correctly designed journal entry.

The journal entry for the above statement is attached below.

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Explanation:

The journal entries are shown below:

On September 9

Petty cash A/c Dr $350

     To Cash A/c            $350

(Being fund is established)

On September 30

Merchandise inventory A/c Dr $40

Postage expense A/c Dr $123

Miscellaneous expenses A/c Dr $80

Cash shortage A/c Dr $3

      To Cash A/c        $246

(Being fund is reimbursed)

On October 1

Petty cash A/c Dr $50              ($400 - $350)

     To Cash A/c            $50

(Being fund is increased by $50)

1

explanation:

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