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.

On January 17, the fund was replenished with a check for $158. Record the transaction.

Answer 1

To replenish the petty cash fund on January 17, an entry must be made that debits the Petty Cash account and credits the Cash account by $158.

Step-by-step explanation:

To record the transaction for replenishing the petty cash fund on January 17, you would need to make the following journal entry:

1. Debit: Petty Cash - $158
2. Credit: Cash - $158

This journal entry increases the balance of the petty cash fund by $158, and decreases the balance of the cash account by the same amount.

It is important to note that the earlier payments made from the petty cash fund should have been recorded as separate journal entries as well.