Petty Cash Fund Management at Canary Inc.

How does Canary Inc. manage its petty cash fund?

Canary Inc. maintains a petty cash fund with a balance of $1,800. During the month of September, Canary's employees made routine expenses using cash from the petty cash fund totaling $1,150. At the end of September, Canary replenishes the petty cash account, but it also decides to increase the fund balance to $2,000. Canary classifies all petty cash transactions as miscellaneous expenses.

Answer:

JOURNAL ENTRIES
no entry for the $1,800 balance
Sep Debit Miscellaneous expense $1,150, Credit Petty cash $1,150
Replenish entry
Debit Petty cash $1,150, Credit Bank account $1,150
Increase in petty cash balance
Debit Petty Cash $200, Credit Bank $200.

The question is incomplete but it requires journal entries for petty cash activities. In the complete question, only the required information is used, not the figures. Canary Inc. begins with $1,800 in their petty cash fund. They spend $1,150 during September, then replenish it back to $1,800 and add an extra $200, increasing the fund balance to $2,000. This is classified as a miscellaneous expense in their account.