Question

1. The petty cash fund of the Brooks Agency is established at $280. At the end of the current period, the fund contained $198 and had the following receipts: entertainment, $50; postage, $24; and printing, $8. Prepare journal entries to record (a) establishment of the fund and (b) reimbursement of the fund at the end of the current period.

Answer 1

Answer:

1a

Dr Petty cash $ 280

Cr Cash $ 280

1b

Dr Entertainment $ 50

Dr Postage $ 24

Dr Printing $ 8

Cr Cash $ 82

Explanation:

A. Preparation of the journal entries to record establishment of the fund

Dr Petty cash $ 280

Cr Cash $ 280

( To record petty cash fund created)

1b. Preparation of the journal entries to record

reimbursement of the fund at the end of the current period.

Dr Entertainment $ 50

Dr Postage $ 24

Dr Printing $ 8

Cr Cash $ 82

(50+24+8)

(To Record reimbursement of the fund)