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This addresses petty cash transactions for Rockin' Gyrations

Accounting for petty cash transactions

Suppose that on June 1, Rockin' Gyrations, a disc jockey service, creates a petty cash fund with an imprest balance of $500. During June, Michael Martell, fund custodian, signs the following petty cash tickets:
Petty Cash ticket # Item Amount
1 Postage for package received $20.00
2 Decorations & Refreshments for office party $25.00
3 2 boxes of stationary $35.00
4 Printer Cartridges $15.00
5 Dinner money for sales mgr entertaining a customer $75.00
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 expense, Entertainment expense, and Postage expense.
Requirements
- 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 July 1 to increase the fund balance to $550. Include an explanation.

Solution Preview

Full solution in attached Word document.

Accounting for petty cash transactions P7-31A
Suppose that on June 1, Rockin' Gyrations, a disc jockey service, creates a petty cash fund with an imprest balance of $500. During June, Michael Martell, fund custodian, signs the following petty cash tickets:
Petty Cash ticket # Item Amount
1 Postage for package received $20.00
2 Decorations & Refreshments for office party $25.00
3 2 boxes of ...

Solution Summary

The solution provides the calculations and journal entries needed for the Rockin' Gyrations petty cash transactions journal entry exercise.

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