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Asked Dec 14, 2019
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Make entries in general journal form to record the following:
1. Establish a Petty Cash Fund, $300.
2. The amount of cash in the petty cash fund is now $10.05. Replenish the
fund based on the following summary of petty cash vouchers:
$62.20
Office Supplies
$75.00
Postage
$59.15
Miscellaneous
$57.50
Repairs
$50.00
Drawing
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Make entries in general journal form to record the following: 1. Establish a Petty Cash Fund, $300. 2. The amount of cash in the petty cash fund is now $10.05. Replenish the fund based on the following summary of petty cash vouchers: $62.20 Office Supplies $75.00 Postage $59.15 Miscellaneous $57.50 Repairs $50.00 Drawing

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Expert Answer

Step 1

Petty cash fund: It is a fund established to pay insignificant amounts like postage, office supplies and lunches. In day to day life, it becomes difficult to use checks for daily expenses. Therefore companies maintain minimum amount of funds in the hands for such daily expenses. These funds are called as petty cash funds. These funds are managed by custodian. This is also referred to as imprest system.

Step 2
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Calculate the anount of cash: Cash spent = Petty cash fund balance - Cash in the hand = $300 – $10.05 = $289.95 Calculate the total expenses: Total expenses = Office supplies+ Postage+ Miscellaneous+Repairs = $62.20+ $75.00+$59.15+ $57.50 = $253.85 Calculate the cash short and over: Cash short and over = Cash spent – Total expense = $289.95 – $253.85 = $36.10

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