Problem
The petty cash fund of $500 for Watson Company appeared as follows on December 31, 2017:
cash $256
petty cash vouchers
supplies $48.5
postage 100.00
freight-out 45.00
meals 62.5
a) Briefly describe when the petty cash fund should be replenished. Because there is cash on hand, is there a need to replenish the fund at year end on December 31? Explain.
b) Prepare in general journal form the entry to replenish the fund.
c) On December 31, the office manager gives instructions to increase the petty cash fund by $100. Make the appropriate journal entry.