The petty cash fund of $300 for Fielding Systems includes the following on December 31, 2021:

Cash$93.60

Petty cash receipts:

Freight in $89.40

Postage55.00

Balloons for a special occasion27.00

Meals30.00

Instructions

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. The company uses a perpetual inventory system.

c)On December 31, the office manager gives instructions to increase the petty cash fund by $50. Make the appropriate journal entry.