Hemingway Company Uses an Imprest Petty Cash System

question 141

Essay

Hemingway Company uses an imprest petty cash system. The fund was established on March 1 with a balance of $200. During March the following petty cash receipts were found in the petty cash box.
The fund was replenished on March 15 when the fund contained $6 in cash. On March 20, the amount in the fund was increased to $300.
Instructions
Journalize the entries in March that pertain to the operation of the petty cash fund.

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Definitions:

Direct Method

An accounting approach for preparing the cash flow statement where operating cash receipts and payments are listed directly.

Inventories

are stocks of goods and materials held by a business in anticipation of future sales or production needs.

Sales Revenue

The total amount of money generated by the sale of goods or services before any costs or expenses are deducted.

Direct Method

An approach to preparing the cash flow statement where actual cash flow information from operating activities is used.