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Lakeland's Business Department completed the following petty cash transactions during July 2020: July 5 Prepared a $500 cheque, cashed it, and turned the proceeds
Lakeland's Business Department completed the following petty cash transactions during July 2020: July 5 Prepared a $500 cheque, cashed it, and turned the proceeds and the petty cash box over to Cassandra Kirkland, the petty cashier. 6 Paid $35 COD charges on merchandise purchased for resale. Lakeland uses the perpetual method to account for merchandise inventory. 11 Paid $46 delivery charges on merchandise sold to a customer. Purchased file folders, $38. 12 18 Purchased paper for printer, $62. 27 Paid $28 COD charges on merchandise purchased for resale. 28 Purchased stamps, $52. 30 Reimbursed John Turvey $125 for business car expenses. 31 Cassandra Kirkland sorted the petty cash receipts by accounts affected and exchanged them for a cheque to reimburse the fund for expenditures. However, there was $105 in cash in the fund. In addition, the size of the petty cash fund was decreased to $400. Required: 1. Prepare a general journal entry to record establishing the petty cash fund. 2. Prepare a Petty Cash Payments Report similar to Exhibit 7.3 that has these categories: delivery expense, auto expense, postage expense, merchandise inventory, and office supplies. 3. Prepare the general journal entry to record the reimbursement and the decrease of the fund.
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