Question

Havermill Co. establishes a $250 petty cash fund on September 1. On September 30, the fund is reimbursed. The accumulated receipts on that date represent $73 for Office Supplies, $137 for merchandise inventory, and $22 for miscellaneous expenses. The fund has a balance of $18. On October 1, the accountant determines that the fund should be increased by $50. The journal entry to record the reimbursement of the fund on September 30 includes a:

credit to Cash for $18.

credit to Merchandise Inventory for $137.

credit to Cash for $250.

debit Petty Cash for $232.

debit to Office Supplies for $73.

Answer 1

The journal entry to replenish Havermill Co.'s petty cash includes debits to Office Supplies, Merchandise Inventory, and Miscellaneous Expenses for their respective amounts, and a credit to Cash for the total of the expenses. The remaining balance in the petty cash fund is not part of this journal entry.

Step-by-step explanation:

The student's question relates to the accounting process for replenishing a petty cash fund in a business context. On September 30, Havermill Co. needs to reimburse the fund for the expenses it has covered, totaling $232, which is the sum of the expenses for office supplies, merchandise inventory, and miscellaneous expenses. The correct journal entry to record the reimbursement of the fund on September 30 would include the following:

• A debit to Office Supplies for $73 (reflecting the expense on supplies),
• A debit to Merchandise Inventory for $137 (reflecting the expense on inventory),
• A debit to Miscellaneous Expenses for $22 (reflecting the miscellaneous expenses),
• A credit to Cash for $232 (reflecting the cash taken out of the main cash account to replenish the petty cash).

The balance of $18 remaining in the petty cash fund is not impacted by the reimbursement. The entry to increase the fund by $50 on October 1 would be a separate transaction.

Answer 2

debit to Office Supplies for $73.

Step-by-step explanation:

On September 30, the fund is reimbursed.

The accumulated receipts on that date represent $73 for Office Supplies, $137 for merchandise inventory,

and $22 for miscellaneous expenses.

The fund has a balance of $18.

The journal entry for the reimbursed petty cash will recognzie the uses for the cash and credit cash for the total amount:

office supplies 73 debit

merchadise inventory 137 debit

miscellaneous expenses 22 debit

Cash 232 credit

--to record the reimbursement of the petty cash fund--