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Problem - The petty cash fund of €200 for Vernon Company appeared as follows on December 31, 2011:
Cash €91.60
Petty cash vouchers
Freight in €22.40
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 €100. Make the appropriate journal entry.
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