Accounting for petty cash Karen’s Dance Studio created a $370 imprest petty cash
ID: 2427998 • Letter: A
Question
Accounting for petty cash
Karen’s Dance Studio created a $370 imprest petty cash fund. During the month, the fund custodian authorized and signed petty cash tickets as follows:
Petty cash
Item
Account debited
Amount
1
Delivery of programs to customers
Delivery expense
$25
2
Mail package
Postage expense
15
3
Newsletter
Printing expense
35
4
Key to closet
Miscellaneous expense
55
5
Copier paper
Office supplies
80
Requirements
Make the general journal entry to create the petty cash fund. Include an explanation.
Make the general journal entry to record the petty cash fund replenishment. Cash is the fund totals $147. Include an explanation.
Assume that Karen’s Dance Studio decides to decrease the petty cash fund to $200. Make the general journal entry to record this decrease.
Petty cash
Item
Account debited
Amount
1
Delivery of programs to customers
Delivery expense
$25
2
Mail package
Postage expense
15
3
Newsletter
Printing expense
35
4
Key to closet
Miscellaneous expense
55
5
Copier paper
Office supplies
80
Explanation / Answer
Date Account title Debit credit 1 Petty cash 370 cash 370 [being petty cash fund ] 2) Delievery expense 25 Postage expense 15 Printing expense 35 Miscellaneous expense 55 Office supplies 80 sundry expense [370-147 =223 expense - 210 incurred] 13 cash 223 [being expenses paid out of petty cash fund and expenses not accounted for recorded and replenished] 3 cash 170 Petty cash [370-200] 170 [being amount in petty cash fund decreased ]