On March 1, The Party Palace creates a petty cash fund with a balance of $300. During March, Ruth Mangan, the fund custodian, signs the following petty cash tickets:
On March 31, prior to replenishment, the fund contains these tickets plus cash of $38. The accounts affected by petty cash payments are Office Supplies Expense, Travel Expense, Delivery Expense, and Entertainment Expense.
Requirements 1. Record the journal entry to create the petty cash fund. 2. Record the journal entry to replenish the petty cash fund on March 31. Do you have any concerns regarding the Cash Short and Over account? 3. Make the April 1 entry to increase the fund balance to $325. Include an explanation, and briefly describe what the custodian does when the balance isincreased.