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:

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 anexplanation.

Transcribed Image Text:

Petty Cash Ticket Number Item Amount Postage for package received 20 Decorations and refreshments 25 for office party Two boxes of stationery Printer cartridges Dinner money for sales manager 35 4 15 75 entertaining a customer 2.