Question
Long Photography completed the following petty cash transactions during July 2020: July 5 Prepared a $500 cheque, cashed it, and turned the proceeds and the
Long Photography 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 Bob Stuart, the petty cashier.
6 Paid $46 COD charges on merchandise purchased for resale. Long Photography uses the perpetual inventory method to account for merchandise inventory.
11 Paid $26 delivery charges on merchandise sold to a customer.
12 Purchased file folders, $76
18 Purchased paper for printer, $27
27 Paid $31 COD charges on merchandise purchased for resale.
28 Purchased stamps, $60.
30 Reimbursed Collin Dodge $134 for business car expenses.
31 Shelly Long sorted the petty cash receipts by accounts affected and exchanged them for a cheque to reimburse the fund for expenditures. However, there was $88 in cash in the fund. In addition, the size of the petty cash fund was decreased to $400.
Required:
- Prepare a general journal entry to record establishing the petty cash fund.
- Prepare a summary of petty cash payments that has these categories; delivery expense, auto expense, postage expense, merchandise inventory, and office supplies.
- Prepare the general journal entry to record the reimbursement and the decrease of the fund.
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