On January 1, Whitecastle Company established a petty cash fund for $250. On January 31, when the petty cash fund was replenished, it contained $70.40 in cash and petty cash receipts for: postage expense, $49.60; office supplies, $62; entertainment expense, $64.21Required:a) Record in general journal format the entry to establish the petty cash fund.b) Record in general journal format the entry to record the disbursements and replenish the petty cash fund.
What will be an ideal response?
a) 
b) 
b) Since the amount of petty cash on hand is $70.40, it will take $179.60 to replenish the petty cash fund to its imprest balance of $250. Because the payments from the fund totaled $175.81 (or $49.60 + $62.00 + $64.21), there is a cash shortage of $3.79.
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