Fargo company established a $250 petty cash fund on March 1 of this year. On Mar

Question

Fargo company established a $250 petty cash fund on March 1 of this year.

On March 22, the fund showed $155 in cash, and receipts for the following expenditures: $32 postage, $48 gasoline expenses, and $13 transportation-in. Fargo uses the perpetual system of accounting for merchandise inventories.

What would be the journal entry to replenish the fund on March 22?

Item # 3 is the correct journal entry

Item # 4 is the correct journal entry

Item # 1 is the correct journal entry

Item # 2 is the correct journal entry

Fargo Company Item Account Name Post Ref DEBIT CREDIT 1 Petty Cash $250     Cash $250 2 Miscellaneous Expense $15 Various Expenses $140    Cash $155 3 Postage Expense $32 Gasoline Expense $48 Cash Over & Short $2 Merchandise Inventory $13      Cash $95      4 Various Expenses $95      Cash $95

Explanation / Answer

Journal entry :

So answer is a) Item # 3 is the correct journal entry

Date account & explanation debit credit Postage expense 32 Gasonline expense 48 Cash over & short 2 Merchandise inventory 13 Cash 95 (To record replenish )

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