Question

Accounting for petty cash Jackie’s Dance Studio created a \(220 imprest petty cash fund. During the month, the fund custodian authorized and signed petty cash tickets as follows: Petty Cash Ticket No. Item Account Debited Amount

1 Delivery of programs to customers Delivery Expense \) 20 2 Mail package Postage Expense 10 3 Newsletter Printing Expense 25 4 Key to closet Miscellaneous Expense 40 5 Copier paper Office Supplies 70

Requirements

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 \(40. Include an explanation.

3. Assume that Jackie’s Dance Studio decides to decrease the petty cash fund to \)120. Make the general journal entry to record this decrease.

Short answer

The amount of cash short & over is $15.

Step-by-step solution

Step-by-Step SolutionStep 1: Definition of petty cash fund

The petty cash fund is the fund that is used to pay a small number of expenses.

Journal entry for creating petty cash fund

Date	Particulars	Debit	Credit
	Petty Cash Fund	$220
	Cash		$220
	(Being journal entry to create petty cash fund)

Journal entry for replenishing the petty cash fund

Date	Particulars	Debit	Credit
	Delivery Expense	$20
	Postage Expense	$10
	Printing Expense	$25
	Misc. Expense	$40
	Office Supplies	$70
	Cash short & over	$15
	Cash		$190
	(Being journal entry for the replenishing of the petty cash fund)

Journal entry for decreasing the amount of petty cash fund

Date	Particulars	Debit	Credit
	Cash	$120
	Petty Cash Fund		$120
	(Being journal entry for decreasing the petty cash fund)