Question: Accounting for petty cash transactions Suppose that on June 1, Fab Gyrations, a disc jockey service, creates a petty cash fund with an imprest balance of $250. During June, Ruth Mangan, fund custodian, signs the following petty cash tickets:
On June 30, prior to replenishment, the fund contains these tickets plus cash of $93. The accounts affected by petty cash payments are Office Supplies, 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 May 1 to increase the fund balance to $275. Include an explanation.