Petty Cash Q-1 On January 1, 2016, Hit Design set up a petty cash fund for $250. At the end of the first week, the petty cash fund contains the following items. Cash on hand $50 Receipt for the purchase of office supplies 40 Receipt for delivery charges 10 Receipt for the purchase of stamps 20 Receipt for travel to a client meeting 50 Receipt for the payment of newspaper advertising 75 Prepare the journal entries for setting up and replenishing the petty cash fund. Q-2 Sky Auctions set up a petty cash fund of $250 on January 1, 2016. The custodian found the following receipts in the cash box for the month. $35 for food for the office employees $63 for fuel for the company vehicle $50 to pay a specialist to update the computer system $46 to purchase supplies for the office. The custodian counted $81 cash remaining in the cash box. Prepare journal entries. Short questions:- What is the purpose of a petty cash system?