Question

The petty cash fund of the Brooks Agency is established at $220. At the end of the current period, the fund contained $155 and had the following receipts: entertainment, $42; postage, $13; and printing, $10. 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

Explanation: Journal Entries:

DR: Petty Cash with $220

CR: Bank/Cash with $220

Being establishment of funds in petty cash

DR: Entertainment with $42

CR: Petty cash with $42

Being cost of entertainment

DR: Postage with $13

CR: Petty cash with $13

Being cost of postage

DR: Printing with $10

CR: Petty cash with $10

Being cost of printing