Theory question 109
Petty CashAcademy Limited operates an imprest system with D20,000 paid out of bank. The following expenses were settled out of petty cash during the month of March, 2010:
March 1. Wages D1,500
2. Rates D1,000
4. Postage stamps D100
5. Transport expenses D4,100
Postage stamps D150
6. Wages D500
10. Rates D500
13. Frank Musa (creditor) D1,000
18. Wages D1,200
Brima (creditor) D2,000
20. Rates D1,500
22. Wages D700
24. Registered letters D500
26. Rates D900
28. Wages D1,000
31. Wages D800
31. Float restored ?
You are required to write up the petty cash book for the month of March 2010 having analysis columns for Rates, Postage, Transport, Wages and Ledger.
Show the model answer
Petty Cash Book (analysis columns: Rates | Postage | Transport | Wages | Ledger)
Receipts: 1 Mar balance/cash from bank D20,000
Each payment entered in the total column and in its analysis column:
Wages: 1,500 + 500 + 1,200 + 700 + 1,000 + 800 = 5,700
Rates: 1,000 + 500 + 1,500 + 900 = 3,900
Postage: 100 + 150 + 500 (registered letters) = 750
Transport: 4,100
Ledger: Frank Musa 1,000 + Brima 2,000 = 3,000
Total payments D17,450 (= 5,700 + 3,900 + 750 + 4,100 + 3,000)
Balance before restoring: 20,000 − 17,450 = D2,550
31 Mar: cash received from bank to restore float D17,450
Balance c/d D20,000 (b/d on 1 April)
Under the imprest system the amount restored equals the total spent in the month.