Question

Mountain Air Company established a $200 petty cash fund on January 1. From January 3 through 15, payments were made from the fund, as listed below. On January 17, the fund was replenished with a check for $158.

January 3—Paid cash for deliveries to customers—$43.
January 8—Paid cash to restaurant for catering office lunch—$83.
January 15—Paid cash for supplies—$32

.Record from January 3 through 15, payments were made from the fund.

Answer 1

The Mountain Air Company had a $200 petty cash fund, from which $158 in payments were made between January 3 and 15, which were documented and included in the financial records when replenished.

Step-by-step explanation:

The Mountain Air Company established a $200 petty cash fund on January 1. When a petty cash fund is established, the company designates a fixed amount of cash to be used for small expenses. These expenses are recorded and then reimbursed to bring the fund back to its original amount. For the time period of January 3 through 15, several payments were made from the fund.

On January 17, the fund was replenished with a check for $158, indicating that these payments made equaled $158. To record these payments, the company would typically create detailed documentation for each petty cash transaction, denoting the date, amount, and purpose of the expense. This documentation ensures that all expenditures from the petty cash fund are transparent and accountable. When the fund is replenished, the various expenses are categorized and entered into the company's financial records, often reducing the specific expense accounts that align with the nature of each petty cash disbursement.