Havermill Co. establishes a $280 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $76 for Office Supplies, $143 for merchandise inventory, and $25 for miscellaneous expenses. The fund has a balance of $36. On October 1, the accountant determines that the fund should be increased by $56. The journal entry to record the establishment of the fund on September 1 is:

Journal entries

Explanation:

The journal entry is shown below:

On September 1

Petty cash A/c Dr $280

             To Cash A/c $280

(Being the establishment of petty cash is recorded)

For recording this journal entry we debited the petty cash and credited the cash so that the proper posting could be done

All other information i.e to be given is not relevant. Hence, ignored it

answer; is usually (less than) the socially optimal level of consumption;