Question

Spencer Co. has a $200 petty cash fund. At the end of the first month the accumulated receipts represent $43 for delivery expenses, $127 for merchandise inventory, and $12 for miscellaneous expenses. The fund has a balance of $18. The journal entry to record the reimbursement of the account includes a:

Answer 1

Answer:

The answers are:

• Dr Delivery expenses account $43
• Dr Miscellaneous expenses $12
• Dr Merchandise inventory $127
• Cr Cash account $188

Explanation:

Expenses paid with petty cash are recorded when the fund is replenished.

Since delivery and miscellaneous expenses are normal operating expenses, they should be debited when recorded.

Merchandise inventory is an asset, and when assets increase, they should be debited.  

Cash is an asset, and when assets decrease, they should be credited.

Answer 2

Answer:

                                                                               Debit               Credit

Petty cash                                                               $182

Cash/Bank                                                                                     $182      

Explanation:

The journal entry for expenses incurred from petty cash fund will be as follows:

                                                                                  Debit               Credit

Office expenses                                                        $182

(43+127+12)

Petty Cash                                                                                         $182

While the Journal entry for the reimbursement of petty cash fund will be as follow:

                                                                               Debit               Credit

Petty cash                                                               $182

Cash/Bank                                                                                     $182      

Since the Spencer Co petty fund has already balance of $18 so $182 more debit in fund will amount to $200 in petty cash fund.