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Difficulty: HardPetty Cash Book and the Imprest System

A petty cashier was maintained on the imprest system with an initial float of ₦50,000₦50,000 on March 1, 2026. During the month of March, the following transactions took place:

- Paid for office stationery: ₦8,400₦8,400
- Paid for postage and stamps: ₦4,600₦4,600
- Paid for office cleaning: ₦6,500₦6,500
- Paid for staff traveling expenses: ₦9,200₦9,200
- Paid to a ledger creditor (Mr. Okafor): ₦5,000₦5,000
- Received refund from an employee for overpaid traveling expenses: ₦1,500₦1,500

At the end of the month, management decided to increase the imprest float by ₦10,000₦10,000 starting from April 1. What is the total amount (in ₦₦) required from the chief cashier to restore and adjust the petty cash float to its new level?

Answer: 42200 ₦

Answer

The total amount required from the chief cashier to restore and adjust the petty cash float is ₦42,200₦42,200.
Under the imprest system, the amount issued by the chief cashier must restore spent funds and accommodate any decided increase in the float. Net expenditure incurred during the period is total disbursements (₦33,700₦33,700) minus refunds received (₦1,500₦1,500), yielding ₦32,200₦32,200. Adding the ₦10,000₦10,000 increase in float gives a total required amount of ₦32,200+₦10,000=₦42,200₦32,200 + ₦10,000 = ₦42,200.

Step-by-Step Solution

1
Calculate total petty cash disbursements during the month
₦33,700₦33,700
Sum all petty payments made: 8,400+4,600+6,500+9,200+5,000=₦33,7008,400 + 4,600 + 6,500 + 9,200 + 5,000 = ₦33,700.
2
Determine net expenditure by subtracting petty receipts
₦32,200₦32,200
The ₦1,500₦1,500 refund received reduces net spent cash from float: 33,700−1,500=₦32,20033,700 - 1,500 = ₦32,200.
3
Calculate cash remaining in hand at month end
₦17,800₦17,800
Subtract net spent amount from original float: 50,000−32,200=₦17,80050,000 - 32,200 = ₦17,800.
4
Determine cash required from chief cashier for new float level
₦42,200₦42,200
New float requirement is ₦50,000+₦10,000=₦60,000₦50,000 + ₦10,000 = ₦60,000. Cash needed = 60,000−17,800=₦42,20060,000 - 17,800 = ₦42,200 (or net expenses of ₦32,200₦32,200 plus float increase of ₦10,000₦10,000).

Key Concept

Imprest system reimbursement and float adjustment calculation
Estimated Time:2m 0s
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Topics

Petty Cash Book and the Imprest System

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