Accounting for petty cash Karen’s Dance Studio created a $370 imprest petty cash

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 ]

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