Nakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory.

Required
1. Prepare the journal entry to establish the petty cash fund.
2. Prepare a petty cash payments report for February with these categories: delivery expense, mileage expense, postage expense, merchandise inventory (for transportation-in), and office supplies expense.
3. Prepare the journal entries for part 2 to both

(a) Reimburse

(b) Increase the fund amount.

Transcribed Image Text:

Feb. 2 5 Wrote a $400 check to establish a petty cash fund. Purchased paper for the copier for $14.15 that is immediately used.