Gupta Company maintains a petty cash fund for small expenditures. The following transactions occurred over a two-month period:

Instructions
a. Journalize the petty cash transactions.
b. What internal control features exist in a petty cash fund?

Taking It Further

Gupta Company established a petty cash fund to pay for a variety of low-value items. Su Ma, the petty cash custodian, regularly borrows cash from the fund to pay for personal expenses. Su Ma has always repaid these amounts. Is this a problem for Gupta Company? If it is, explain what the company could do to strengthen internal control.

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Feb. 1 Feb. 15 Feb. 28 Established petty cash fund by writing a cheque on Algonquin Bank for $200. Replenished the petty cash fund by writing a cheque for $195.00. On this date, the fund consisted of $5.00 in cash and the following petty cash receipts: $82.00 72.50 36.60 Delivery expense Postage expense Entertainment expense Replenished the petty cash fund by writing a cheque for $152.00. On this date, the fund consisted of $48.00 in cash and the following petty cash receipts: Repair expense $42.50 Entertainment expense 25.00 Repairs expense 41.90 Supplies 45.00 Mar. 15 Replenished the petty cash fund by writing a cheque for $187.00. On this date, the fund consisted of $13.00 in cash and the following petty cash receipts: Delivery expense $37.60 Entertainment expense 53.75