P7-31A Accounting for petty cash transactions [20–30 min] Suppose that on June 1, Rockin’ Gyrations, a disc jockey service, creates a petty cash fund with an imprest balance of $500. During June, Michael Martell, fund custodian, signs the following petty cash tickets:

Price: $3.99


P7-31A Accounting for petty cash transactions [20–30 min]
Suppose that on June 1, Rockin’ Gyrations, a disc jockey service, creates a petty cash
fund with an imprest balance of $500. During June, Michael Martell, fund custodian,
signs the following petty cash tickets:

Postage for package received
Decorations and refreshments
for office party
Two boxes of stationery
Printer cartridges
Dinner money for sales manager
entertaining a customer
Item
1
2
3
4
5
$ 20
25
35
15
75

On June 30, prior to replenishment, the fund contains these tickets plus cash of
$325. The accounts affected by petty cash payments are Office supplies expense,
Entertainment expense, and Postage expense.
Requirements
1. On June 30, how much cash should this petty cash fund hold before it is
replenished?
2. Journalize all required entries to (a) create the fund and (b) replenish it. Include
explanations.
3. Make the entry on July 1 to increase the fund balance to $550. Include
an explanation