Financial and Managerial Accounting, 8th Edition problem 6-3b

Blues Music Center had the following petty cash transactions in March of the current year. Blues 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 March 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 and (b) increase the fund amount.