Dance Studio created a $270 imprest petty cash fund. During the month, the fund

Question

Dance Studio created a $270 imprest petty cash fund. During the month, the fund custodian authorized and signed petty cash tickets as follows:

1. Make the general journal entry to create the petty cash fund. Include an explanation.
2. Make the general journal entry to record the petty cash fund replenishment. Cash in the fund totals $69. Include an explanation.
3. Assume that Lori's Dance Studio decides to decrease the petty cash fund to $ 150. Make the general journal entry to record this decrease.

Petty Cash Ticket No. Item Account Debited Amount 1 Delivery of programs Delivery Expense $ 30 to customers 2 Mail package 3 Newsletter 4 Postage Expense Printing Expense Miscellaneous Expense Office Supplies 25 35 40 Key to closet Copier paper

Explanation / Answer

Required journal entries related to Petty Cash are as shown below:

Date Particulars L.F Amount ($) Amount ($) 1 Petty Cash 270 Cash 270 (For petty cash fund established) 2 Delivery Expense 30 Postage Expense 25 Printing Expense 35 Miscellaneous Exp 40 Office Supplies 55 Cash over and short 16 Petty cash 201 (For petty cash fund was replenished) 3 Petty Cash 81 Cash 81 (For petty cash fund increased)

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