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Halle's Berry Farm establishes a $350 petty cash fund on September 4 to pay for minor cash expenditures. The fund is replenished at the end of each month. At the end of September, the fund contains $278 in cash. The company has also issued a credit card and authorized its office manager to make purchases. Expenditures for the month include the following items:
Office party decorations (petty cash) 72
Lawn maintenance (credit card 102
Fuel for delivery (credit card) 67
Postage (credit card) 57
Required:
Record the establishment of the petty cash fund on September 4, all expenditures made during the month, and the replenishment of the petty cash fund on September 30. The credit card balance is not yet paid.

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Answer:

1. September 04

Dr Petty Cash $350

Cash $350

2. September 30

Dr Repairs and Maintenance expense $102

Dr Postage expense $57

Dr Delivery expense $67

Cr Accounts payable $226

3. September 30

Dr Entertainment expense $72

Cr Petty Cash $72

Explanation:

1. Preparation of the journal entry to Record the establishment of the petty cash fund on September 4

September 04

Dr Petty Cash $350

Cash $350

(Being To record the establishment of petty cash fund)

2. Preparation of the journal entry to record all expenditures made during the month

September 30

Dr Repairs and Maintenance expense $102

Dr Postage expense $57

Dr Delivery expense $67

Cr Accounts payable $226

($102+$57+$67)

(Being to record all expenditures made )

3. Preparation of the journal entry to record the replenishment of the petty cash fund on September 30

September 30

Dr Entertainment expense $72

Cr Petty Cash $72

(Being to record the replenishment of the petty cash fund)

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