P7-2A

Arial Ltd. maintains a petty cash fund for small expenditures. The following transactions occurred over a 2-month period.

July 1 Established petty cash fund by writing a check on Coulter Bank for 200. 15 Replenished the petty cash fund by writing a check for 198.00. On this date, the fund consisted of 2.00 in cash and the following petty cash receipts: freight-out 87.00, postage expense 51.40, entertainment expense 46.60, and miscellaneous expense 11.20.

31 Replenished the petty cash fund by writing a check for 192.00. At this date, the fund consisted of 8.00 in cash and the following petty cash receipts: freight-out 82.10, charitable contributions expense 45.00, postage expense 25.50, and miscellaneous expense 39.40.

Aug. 15 Replenished the petty cash fund by writing a check for 187.00. On this date, the fund consisted of 13.00 in cash and the following petty cash receipts: freight-out 75.60, entertainment expense 43.00, postage expense 33.00, and miscellaneous expense 37.00.

Instructions (a) Journalize the petty cash transactions.

(b) Post to the Petty Cash account.

(c) What internal control features exist in a petty cash fund?

16 Increased the amount of the petty cash fund to 300 by writing a check for 100.

31 Replenished the petty cash fund by writing a check for 277.00. On this date, the fund consisted of 23 in cash and the following petty cash receipts: postage expense 133.00, travel expense 95.60, and freight-out 47.10