Amara keeps a petty cash book under the imprest system. The imprest float of $200 is topped up on the first day of every month. On 1 January 2020, Amara had $65 in petty cash.
Any payment below $100 is settled from petty cash.
On 1 January 2020, Amara owed $85 to Razvan, who is a credit supplier.
Amara gave the following details for January 2020.
January
1 The petty cash imprest was replenished from the business bank account.
3 Bought stationery for cash, $24
7 Paid travelling expenses, $49
14 Paid Razvan the outstanding amount on his account
19 Bought goods on credit from Razvan, $200 less 10% trade discount
22 Paid taxi fare, $18
28 Returned goods to Razvan that had been bought on 19 January, list price $40
29 Paid postage, $11
(a)[10]
Prepare Amara’s petty cash book for January 2020 on the page opposite. Balance the petty cash book and carry the balance down to 1 February 2020.
(b)[6]
Prepare Amara’s account as it would be shown in Razvan’s ledger. Balance the account and carry the balance down on 1 February 2020.
(c)[2]
Complete the table below by putting a tick (✓) in the appropriate column to show how Razvan ought to record the cash discount. If an account has no entry, tick ‘no entry’.
(d)[2]
State two other methods that Amara could use to pay Razvan from her bank account.
Worked solution & mark scheme
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