Spector Enterprises needs to establish a petty cash fund to pay for incidental expenses to be paid out for things such as expense reimbursements to delivery drivers. The owner decides that an opening balance of $150 would be appropriate. During the first month, the following expenses were incurred:

Date

Item

Amount

May 2

Parking costs

$5.25

May 7

Note paper

$17.85

May 8

Stamps

$12.75

May 13

Home Depot - door repairs

$43.65

May 21

Parking costs

$7.95

May 27

Copy paper

$57.63

At the end, there was $3.30 remaining in the petty cash fund.But while replenishing the petty cash fund, Spector Enterprises wishes to increase it to $200.

Required:

a)Record the journal entry to establish the petty cash fund

DR:CR:b)Prepare proper petty cash report for the month, grouping the

expenses under the following headings: Delivery Expense, AdvertisingExpense, Office supplies and Maintenance.

DateItemDelivery ExpAdvertising ExpOffice Supplies ExpMaintenanceTotalTotals:Amount needed to replenish fund:Opening Balance: Cash Remaining: Cash Over/Short

4marksc)Prepare the journal entry to record the results of the report from

part b) and to show the replenishment and increase of the fund.

Account nameDebitCreditDelivery ExpenseAdvertising ExpenseOffice SuppliesMaintenanceCash over / shortPetty CashBank