Theory question 108
Petty Cash8. Joana Bonnah operates an imprest system with analysed petty cash book. There are columns for Stationery, Transport, Postage and Medical Expenses. A float of N200,000 is maintained by the petty cashier who is reimbursed as and when necessary.
The following transactions were recorded in the month of September, 1998:
2 balance on hand N200,000
6 bought postage stamps N28,000
7 paid medical expenses N48,000
12 bought stationery N28,500
16 paid transport expenses N68,000
20 paid medical expenses N40,800
22 paid for postage stamps N6,200
22 paid transport expenses N18,800
24 bought stationery N6,800
24 paid transport expenses N32,600
28 bought postage stamps N8,500
30 paid medical expenses N26,500
You are required to enter the details above in a columnar petty cash book.
Show the model answer
Columns: receipts | date | details | total | stationery | transport | postage | medical.
Sept 2 balance 200,000. Payments: 6th postage 28,000; 7th medical 48,000; 12th stationery 28,500; 16th transport 68,000 (spent 172,500, cash left 27,500).
The next payment (40,800) is more than the cash left, so on 16th the cashier is reimbursed 172,500 from the bank, restoring the float to 200,000.
20th medical 40,800; 22nd postage 6,200; 22nd transport 18,800; 24th stationery 6,800; 24th transport 32,600; 28th postage 8,500; 30th medical 26,500 (spent 140,200, cash left 59,800).
Column totals for the month: stationery 35,300; transport 119,400; postage 42,700; medical 115,300; total 312,700.
30th reimbursement from bank 140,200; balance c/d 200,000 (receipts 200,000 + 172,500 + 140,200 = 512,700 = payments 312,700 + balance 200,000).
Under the imprest system the cashier is given back exactly what was spent, so the float returns to its fixed amount.