Please let me know how to establish and reimbures the fund of Gannon Company!?

Question

gannon co. establishes a $400 petty cash fund on September 9th. on September 30th the fund shows $166 in cash along with the following expenditures: transportation-in, $32; postage expenses, $113; and misc. expenses, $87. The petty cashier could not account for a $2 shortage in the fund. Gannon uses the perpetual system in accounting for merchandise inventory. Prepare (1) the september 9 entry to establish the fund and (2) the september 30 entry to both reimburse the fund and reduce it to $300.

Answer 1

Prepare (1) the September 9 entry to establish the fund

Dr  Petty cash $400

Cr  Cash $400

(2) the September 30 entry to both reimburse the fund and reduce it to $300.

Dr  Merchandise inventory $32

Dr  Postage expense $113

Dr  Miscellaneous expenses $87

Dr  Cash shortage $2

Cr  Petty cash $234

(being amounts expended from petty cash)

Dr  Petty cash $134

Cr  Cash $134

(being amount needed to top up the petty cash box to $300)

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