On July 1, Chi Kong creates a petty cash fund with a balance of $300. During July, Elise Sautter, the fund custodian, signs the following petty cash tickets:

On July 31, prior to replenishment, the fund contains these tickets plus cash of $62. The accounts affected by petty cash payments are Office Supplies Expense, Travel Expense, Delivery Expense, and Entertainment Expense.
Requirements
1. Record the journal entry to create the petty cash fund.
2. Record the journal entry to replenish the petty cash fund on July 31. Do you have any concerns regarding the Over/Short account?
3. Make the August 1 entry to increase the fund balance to $350. Include an explanation, and briefly describe what the custodian does when the balance is increased.

Transcribed Image Text:

Petty Cash Ticket Number 101 102 103 104 Item Amount Office supplies Cab fare for executive Delivery of package across town Dinner money for president and a potential customer $86 27 10 110