The Hayden Company has only one journal in its accounting system and records all transactions in that general journal. However, the company recently set up a petty cash fund to facilitate payments of small items. The following transactions involving the petty cash fund were noted by the petty cashier as occurring during April (the last month of the company's fiscal year).

Apr. 2 Received a company check for \(\$ 75\) to establish the petty cash fund.

10 Received a company check to replenish the fund for the following expenditures made since April 1 and to increase the fund to \(\$ 150\).

a. Payment of \(\$ 10.50\) to Ed's Trucking for freight on merchandise delivered to Atkins Company.

b. Purchased postage stamps for \(\$ 22\).

c. Gave Janet Knox, owner of the business, \(\$ 15\) for personal use.

d. Paid \(\$ 22.75\) to Perry Company for repairs of office equipment.

e. Discovered that only \(\$ 3.25\) remained in the petty cashbox.

30 Having decided that the April 10 increase in the fund was too large, received a company check to replenish the fund for the following expenditures made since April 10 but allowing the fund to be reduced in size to \(\$ 100\).

a. Payment of \(\$ 27.50\) for emergency repairs to the company's office computer printer.

b. Payment of \(\$ 25\) for janitorial service.

c. Purchased office supplies for \(\$ 36.75\).

d. Payment of \(\$ 53.20\) to King Advertising for a space advertisement in a weekly newsletter.

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1. Prepare general journal entries to record the establishment of the fund on April 2 and its replenishments on April 10 and on April 30.

2. If Hayden Company had failed to replenish the petty cash fund on April 30, what would have been the effect on net income for the fiscal year ended April 30 and on total assets on April 30? Explain your answer.