Hangin’ Out Night Club maintains an imprest petty cash fund of $100, which is under the control of Sandra Morgan. At March 31, the fund holds $9 cash and petty cash tickets for office supplies, $77, and delivery expense, $20.
Requirements
1. Explain how an imprest petty cash system works.
2. Journalize establishment of the petty cash fund on March 1 and replenishment of the fund on March 31.
3. Prepare a T-account for Petty cash, and post to the account. What is Petty cash’s balance at all times?