Gannon Company establishes a $400 petty cash fund on September 9. On September 30, the fund shows $166 in cash along with receipts for the following expenditures: transportation-in, $32; postage expenses, $113; and miscellaneous 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.© BrainMass Inc. brainmass.com October 9, 2019, 9:39 pm ad1c9bdddf
The solution presents the entries to record the initial petty cash fund, and the subseqent reimbursement of the fund. The solution explains how to calculate and report the shortage.