Get your Motor Runnin\' sets up a petty cash system on July 1 by cashing a check

Question

Get your Motor Runnin' sets up a petty cash system on July 1 by cashing a check wirtten to Petty Cash for $150 and placing the cash in a cash box.

The following items were paid out of petty cash during the month of July:

3-Jul     Misc Office Supplies                                                          $34.50

5-Jul     Postage due                                                                      $3.20

10-Jul   Donuts for office meeting (charged to Misc expense)       $12.80

On July 30, the bookkeeper counted the cash in the petty cash box and completed the journal entry to replenish petty cash. There was $99.00 in the box.

Instuctions

Prepare the journal entry to set up the petty cash system on July 1 and the entry to replenish petty cash on July 31.

Journal Date Account Title Debit Credit

Explanation / Answer

Date Title Debit credit 1 july Petty cash 150 cash 150 [being petty cash fund created] 3 july office supplies expense 34.5 Petty cash 34.5 5 july postage 3.2 Petty cash 3.2 10 july Misc,expense 12.8 Petty cash 12.8 31 july Petty cash 51 cash 51 [being petty cash replenished]

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