Questions: Pelcher Company maintains a 445 petty cash fund. On January 31, the fund is replenished. The accumulated receipts on that date represent 119 for office supplies, 158 for merchandise inventory, and 79 for miscellaneous expenses. There is a cash overage of 7. Based on this information, the amount of cash in the fund before the replenishment is: Multiple Choice 445. 96. 82. 356. 89.

Pelcher Company maintains a 445 petty cash fund. On January 31, the fund is replenished. The accumulated receipts on that date represent 119 for office supplies, 158 for merchandise inventory, and 79 for miscellaneous expenses. There is a cash overage of 7. Based on this information, the amount of cash in the fund before the replenishment is:

Multiple Choice
445.
96.
82.
356.
89.

Transcript text: Pelcher Company maintains a $\$ 445$ petty cash fund. On January 31 , the fund is replenished. The accumulated receipts on that date represent $\$ 119$ for office supplies, $\$ 158$ for merchandise inventory, and $\$ 79$ for miscellaneous expenses. There is a cash overage of $\$ 7$. Based on this information, the amount of cash in the fund before the replenishment is: Multiple Choice $\$ 445$. $\$ 96$. \$82. \$356. \$89.

Solution

Solution Steps

To determine the amount of cash in the fund before replenishment, we need to calculate the total expenses and compare it to the initial petty cash fund. The total expenses are the sum of office supplies, merchandise inventory, and miscellaneous expenses. The cash overage indicates that there is more cash than expected, so we subtract the overage from the total expenses to find the actual cash spent. Finally, subtract the actual cash spent from the initial petty cash fund to find the cash remaining before replenishment.

Step 1: Calculate Total Expenses

The total expenses incurred by Pelcher Company can be calculated as follows: \[ \text{Total Expenses} = \text{Office Supplies} + \text{Merchandise Inventory} + \text{Miscellaneous Expenses} \] Substituting the values: \[ \text{Total Expenses} = 119 + 158 + 79 = 356 \]

Step 2: Determine Actual Cash Spent

The actual cash spent is determined by subtracting the cash overage from the total expenses: \[ \text{Actual Cash Spent} = \text{Total Expenses} - \text{Cash Overage} \] Substituting the values: \[ \text{Actual Cash Spent} = 356 - 7 = 349 \]

Step 3: Calculate Cash Before Replenishment

To find the cash in the fund before replenishment, we subtract the actual cash spent from the initial petty cash fund: \[ \text{Cash Before Replenishment} = \text{Initial Fund} - \text{Actual Cash Spent} \] Substituting the values: \[ \text{Cash Before Replenishment} = 445 - 349 = 96 \]