Waupaca company establishes a $410 petty cash fund on september 9. on september 30, the fund shows $134 in cash along with receipts for the following expenditures: transportation-in, $60; postage expenses, $70; and miscellaneous expenses, $135. the petty cashier could not account for a $11 shortage in the fund. the company uses the perpetual system in accounting for merchandise inventory. prepare (1) the september 9 entry to establish the fund, (2) the september 30 entry to reimburse the fund, and (3) an october 1 entry to increase the fund to $485.

The Journal entries are as follows:

(1) On September 9,

Petty cash A/c      Dr.     $410

To cash                                         $410

( To establish $410 petty cash fund)

(2) On September 30,

Printing expenses A/c              Dr. $60

Postage expenses A/c             Dr. $70

Miscellaneous expenses A/c   Dr. $135

Cash over and short A/c           Dr. $11

To cash A/c                                                  $276

(To reimburse petty cash fund)

(3) On October 1,

Petty cash A/c        Dr.  $75

To cash A/c                              $75

(To increase the petty cash fund to $485)

answer; the correct answer is (direct foreign investment);

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