QUESTION 4(9 marks)

The following are petty cash transactions for Sonar Company for the month of August.

Aug 3Management decides to establish a $275.00 petty cash account for the Sales & Marketing Department.

The following are petty cash transactions supported by receipts and the cash balance in petty cash box.

Aug 11Mail and postage ...................................... $ 124.75

Aug20Contributions and donations..................... $ 53.25

Aug28Meals and entertainment.......................... $ 63.85

Aug30Cash on-hand ......................................... $ 32.75

Sept 1Management decides to increase the petty cash fund to $400.00 from $275.00.

Required:

a)Journalize the establishment of the petty cash fund account.

b)Assume that on Aug 30, the Sales & Marketing Department submitted all petty cash receipts to the Finance & Accounting Department for the replenishment of its petty cash fund. Journalize the replenishment of the petty cash fund.

c)Journalize the increase in petty cash fund.