Childers company, which uses a perpetual inventory system, has an established petty cash fund in the amount of $500. the fund was

Childers company, which uses a perpetual inventory system, has an established petty cash fund in the amount of $500. the fund was last reimbursed on november 30. at the end of december, the fund contained the following petty cash receipts: december 4 freight charge for merchandise purchased $ 61december 7 delivery charge for shipping to customer $ 85december 12 purchase of office supplies $ 50december 18 donation to charitable organization $ 69if, in addition to these receipts, the petty cash fund contains $227.25 of cash, the journal entry to reimburse the fund on december 31 will include: a debit to petty cash of $111.a credit to cash over and short of $7.75.a credit to cash of $272.75.a credit to office supplies of $85.a debit to transportation-in of $111.

Answer

c. A credit to Cash of $272.75. Explanation: These transactions can be explained with the help of T- Account . Cash             Debit                   Credit Bal $ 500 Freight $61 Shipping Charges  $ 85 Supplies  $ 50 Donation  $ 69 Suspense   7.75 Fund     $ 227.25 Fund   $ 227.25 Reimbursement $272.75 $ 500 As there is shortage of $ 272.25 in the amount of $ 500 the petty cash will be reimbursed with this amount. An amount of $ 7.75 is short  which is dealt in suspense account and reimbursed with the amount falling short.

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