Question

Exercise 7-8 Horvath Company uses an imprest petty cash system. The fund was established on March 1 with a balance of $105. During March, the following petty cash receipts were found in the petty cash box. Date Receipt No. For Amount 3/5 1 Stamp Inventory $38 7 2 Freight-Out 14 9 3 Miscellaneous Expense 12 11 4 Travel Expense 25 14 5 Miscellaneous Expense 8 The fund was replenished on March 15 when the fund contained $6 in cash. On March 20, the amount in the fund was increased to $190. Journalize the entries in March that pertain to the operation of the petty cash fund. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Answer 1

Answer:

The Journal entries are as follows:

(i) On March 1,

Petty cash A/c       Dr. $105

To cash                                  $105

(Petty cash balance)

(ii) During March,

Stamp inventory A/c                                      Dr.  $38

Freight out A/c                                               Dr.  $14

Misc. Expenses A/c (12+8)                             Dr.  $20

Travel Expenses A/c                                      Dr.  $25

over / short A/c (105 -38-14-20-25-6)           Dr.  $ 8

To cash                                                                               $105

(Petty cash received)

(iii) On March 20,

Petty cash A/c (190-105)      Dr. $85

To cash                                               $85

(Petty cash fund increased to $190)