On January 2 2016 Viva Stores decided to set up a petty cash

On January 2, 2016, Viva Stores decided to set up a petty cash fund. The treasurer established the fund by writing and cashing a $250 check and placing the coin and currency in a locked petty cash drawer. Conrad Boswell was designated as the custodian for the fund. During January, the following receipts were given to Boswell in exchange for cash from the fund:

A count of the cash in the drawer on January 31 revealed a balance of $53.25. The treasurer wrote and cashed a check on the same day to restore the fund to its original balance of $250.

Prepare the necessary journal entries for January. Assume that all stamps and office supplies were used during the month. How does this entry affect the accounting equation?
Indicate the effect on financial statement items by selecting \"–\" for decrease (or negative effect), \"+\" for increase (or positive effect) and \"NE\" for No Entry (or no effect) on the financial statement. If required, round your answers to two decimal places.

Express Delivery Service	$74.50
Vintage Print Shoppe (employee party)	55.75
U.S. Post Office (stamps)	44.00
Office Supplies Pronto (pencils, paper)	23.00

Solution

Journal Balance Sheet Income Statement Stockholders’ Net Date Description Debit Credit Assets = Liabilities + Equity Revenues – Expenses = Income Jan. 2 Petty Cash fund 250 Increase in Asset - Petty cash fund    Cash 250 Corresponding decrease in asset - Cash A/c Jan-31 Delivery Expense 74.5 Expenses to be debited to Income Statement & shall be reduced from stockholders equity Staff welfare expense 55.75 Postage Expense 44 office supplies expense 23      Cash over and short 0.5 Cash over & short is a gain and shall be added to stockholders equity      Cash 196.75 Increase in Asset - Petty cash fund & corresponding decrease in asset - Cash A/c