Waupaca Company establishes a $420 petty cash fund on September 9. On September 30, the fund
shows $164 in cash along with receipts for the following expenditures: transportation costs of
merchandise inventory purchased, $47; postage expenses, $74; and miscellaneous expenses, $132.
The petty cashier could not account for a $3 shortage in the fund. Waupaca uses the perpetual system in accounting for merchandise inventory.
(1)Prepare the September 9 entry to establish the fund.
(2) Prepare the September 30 entry to reimburse the fund.
(3)Prepare an October 1 entry to increase the fund to $470.
1. For each of the following items, indicate whether its amount affects the bank or book side of a bank
reconciliation and represents an addition or a subtraction in a bank reconciliation and whether an
adjusting journal entry is required:
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