Question

Q1 Ch8

Suppose that on June 1, Rockin' Gyrations, a disc jockey service, creates a petty cash fund with an imprest balance of $500. During June, Sunny Lewis, fund custodian, signs the following petty cash tickets: (Click the icon to view the petty cash tickets.) On June 30, prior to replenishment the fund contains these tickets plus cash of $325. The accounts affected by petty cash payments are Office Supplies, Entertainment Expense, and Postage Expense. Read the requirements. Requirement 1. On June 30, how much cash should this petty cash fund hold before it's replenished? Before replenishment, the petty cash fund should hold cash of $ 330 Requirement 2. Joumalize all required entries to (a) create the fund and (b) replenish it. Include explanations. (Record debits first, then, credits. Select the exclanation on the last line of the journal entry table.) Journalize the creation of the fund Date Accounts and Explanation Debit Credit Data Table Jun. 1 Petty Cash Ticket Number Item Amount 1 $ 30 2 25 3 Postage for package received Office party Two boxes of stationery Printer Cartridges Business dinner 0 Requirements 35 15 4 5 5 65 Print Done 1. On June 30, how much cash should this petty cash fund hold before it is replenished? 2. Journalize all required entries to (a) create the fund and (b) replenish it. Include explanations 3. Make the entry on May 1 to increase the fund balance to $575. Include an explanation Print Done

Answer 1

Answer to Requirement 2: Journal Entries Date Account Title and Explaination Post. Ref. Debit $ Credit $ Jun. 1 $ 500.00 Petty Cash Fund Cash (To record Establishment of Petty Cash Fund) $ 500.00 Jun.30 Postage Expense Entertainment Expense ($25 + $65) Office Supplies ($35+$15) Cash Shortage (Excess) ($500-$30-$90-$50 -$325) Cash (To record replenishment of Petty Cash Fund) A A A A 30.00 90.00 50.00 5.00 $ 175.00

Answer to Requirement 3: Journal Entries Date Account Title and Explaination Post. Ref. Debit $ Credit $ May.1 S 75.00 $ 75.00 Petty Cash Fund ($575 - $500) Cash (To record increase of Petty Cash fund balance from 500 to 575)