6 Prob Q 2

Nakashima Gallery had the following petty cash transactions in February of the current year Feb. 2 Wrote a $350 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier. 5 Purchased bond paper for the copier for $15.95 that is immediately used 9 Paid $38.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory 12 Paid $7.65 postage to express mail a contract to a client. 14 Reimbursed Adina Sharon, the manager, $72 for business mileage on her car. 20 Purchased stationery for $69.77 that is immediately used 23 Paid a courier $21 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $11.00 COD shipping charges on merchandise purchased for resale, terms FOB shipping point 27 Paid $58 for postage expenses 28 The fund had $25.67 remaining in the petty cash box. Sorted the petty cash receipts by accounts affected and exchanged therm for a check to reimburse the fund for expenditures. 28 The petty cash fund amount is increased by $80 to a total of $430 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. Sort the payments into the appropriate categories and total the expenditures in each category 3. Prepare the journal entries for required 2 to both (a) reimburse and (b) increase the fund amount