19 Havermill Co. establishes a $390 petty cash fund on September 1. On September

Question

19

Havermill Co. establishes a $390 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $87 for Office Supplies, $165 for merchandise inventory, and $36 for miscellaneous expenses. The fund has a balance of $102. On October 1, the accountant determines that the fund should be increased by $78. The journal entry to record the reimbursement of the fund on September 30 includes a:

Debit to Office Supplies for $87.

Credit to Merchandise Inventory for $165.

Credit to Cash for $390.

Debit Petty Cash for $288.

Credit to Cash for $102.

Havermill Co. establishes a $390 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $87 for Office Supplies, $165 for merchandise inventory, and $36 for miscellaneous expenses. The fund has a balance of $102. On October 1, the accountant determines that the fund should be increased by $78. The journal entry to record the reimbursement of the fund on September 30 includes a:

Explanation / Answer

The journal entry to record the reimbursement of the fund on September 30 includes a debit to office supplies for $87 is determine by observing the following journal entries.

Company established petty cash:

Date

Account title and Explanation

Debit

Credit

Sep 1

Petty Cash

$        390

       Cash at Bank

$        390

(Company established petty cash)

Disbursement from petty cash:

Date

Account title and Explanation

Debit

Credit

Sep

Office Supplies

$          87

Merchandise Inventory

$        165

Miscellaneous expenses

$          36

          Petty Cash

$        288

(Disbursement from petty cash)

Company replenished petty cash:

Date

Account title and Explanation

Debit

Credit

Oct 1

Petty Cash

$          78

       Cash at Bank

$          78

(Company replenished petty cash)

Date

Account title and Explanation

Debit

Credit

Sep 1

Petty Cash

$        390

       Cash at Bank

$        390

(Company established petty cash)

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