Petty Cash with Change in Fund Balance Basque Ltd maintains

Petty Cash with Change in Fund Balance Basque Ltd. maintains a petty cash fund with a balance of $800. On December 31, Basque\'s petty cash account has a balance of $60. Basque replenishes the petty cash account, as it does at the end of every month, but also decides to increase the fund balance to $1,000. Basque classifies all petty cash transactions as miscellaneous expense Required: What journal entry is made to record this activity? For those boxes in which no entry is required, leave the box blank. Dec. 31 Petty Cash Miscellaneous Expense V Cash (Replenish and increase the petty cash fund)

Solution

31-Dec Petty cash 200 Miscellaneous expense 740 (800-60)           Cash 940