BA 99.

1: Petty Cash Fund

Ex. 136
The petty cash fund of Php 200 for Walsh Company appeared as follows on December 31,
2011:

Cash Php 95.60

Petty cash vouchers

Freight in Php 19.40
Postage 40.00
Balloons for a special occasion 18.00
Meals 25.00

Instructions
1. Briefly describe when the petty cash fund should be replenished. Because there is cash on
hand, is there a need to replenish the fund at year end on December 31? Explain.
2. Prepare in general journal form the entry to replenish the fund.
3. On December 31, the office manager gives instructions to increase the petty cash fund by
Php 100. Make the appropriate journal entry.

Solution 136
1. Petty cash should be replenished on a periodic basis or when the cash is low. It must be
replenished on the balance sheet date so that the expenses represented by the petty cash
vouchers can be recorded in the proper accounting period.

2. Freight-in........................................................................................ 19.40
Postage Expense ........................................................................... 40.00
Miscellaneous Expense.................................................................. 18.00
Meals Expense............................................................................... 25.00
Cash Over and Short...................................................................... 2.00
Cash...................................................................................... 104.40

3. Petty Cash ..................................................................................... 100.00

Cash...................................................................................... 100.00

Ex. 137
Prepare the entry to replenish the Php 200 petty cash fund of Warner Company, assuming the
fund has receipts for: freight-out Php 60, postage Php 105, and miscellaneous expense Php 20.
The fund contains Php 12 in cash.

Page 1 of 2
 BA 99.1: Petty Cash Fund

Solution 137
Freight-out ........................................................................................... 60
Postage Expense................................................................................. 105
Miscellaneous Expense ....................................................................... 20
Cash Over and Short ........................................................................... 3
Cash (Php 200 – Php 12) ......................................................... 188

Ex. 138
On October 1, 2011, Foster Company establishes an imprest petty cash fund by issuing a check
for Php 150 to Jill Nott, the custodian of the petty cash fund. On October 31, 2011, Jill Nott
submitted the following paid petty cash receipts for replenishment of the petty cash fund when
there is Php 7 cash in the fund:

Freight-in Php 25
Office Supplies Expense 35
Entertainment of Clients 60
Postage Expense 20

Instructions
Prepare the journal entries required to establish the petty cash fund on October 1 and the
replenishment of the fund on October 31.

Solution 138
Oct. 1 Petty Cash.......................................................................... 150
Cash .......................................................................... 150
(To establish a petty cash fund)

31 Cash Over and Short .......................................................... 3

Freight-in ............................................................................ 25
Office Supplies Expense..................................................... 35
Entertainment Expense ...................................................... 60
Postage Expense ............................................................... 20
Cash .......................................................................... 143
(To record expenses for October and to replenish
the petty cash fund)

Page 2 of 2