Hawk Company establishes a $360 petty cash fund on September 9. On September 30, the fund shows $75 in cash along with receipts for the following expenditures: transportation-in, $58; postage expenses, $69; and miscellaneous expenses, $153. The petty cashier could not account for a $5 shortage in the fund. Hawk uses the perpetual system in accounting for merchandise inventory. (1) Prepare the September 9 entry to establish the fund.

Hawk Company establishes a $360 petty cash fund on September 9. On September 30, the fund shows $75 in cash along with receipts for the following expenditures: transportation-in, $58; postage expenses, $69; and miscellaneous expenses, $153. The petty cashier could not account for a $5 shortage in the fund. Hawk uses the perpetual system in accounting for merchandise inventory.
(1) Prepare the September 9 entry to establish the fund.


Prepare the September 30 entry to reimburse the fund.

Prepare an October 1 entry to decrease the fund to $320.

Explanation:

2.
Merchandise Inventory: Transportation-in costs are included in the Merchandise Inventory account under a perpetual system.