Melanie Fuentes Company had the following petty cash transactions in August 2022:

Aug. I Wrote a $500 check, cashed it, and gave the proceeds to Emelin Gutierrez,

the petty cashier.

5 Purchased copier paper, $30.30 that was immediately used.

8 Paid $49.00 shipping charges on merchandise purchased for resale, terms FOB

shipping point. Melanie Fuentes uses the perpetual system to account for inventory.

14 Paid $6.90 postage to express mail a contract to a customer.

Reimbursed Kevin Cruz, the manager, $70.00 for a business lunch with a customer, Julia Agostini.

Purchased stationery, for $56.80 that was immediately used.

Paid a courier $25.00 to deliver merchandise sold to a customer, terms FOB destination.

25 Paid $15.75 shipping charges on merchandise purchased for resale, terms FOB

shipping point (Transportation-in).

27 Paid $83.00 for stamps, envelopes, and address labels classified as postage expense.

30 The fund had $165.25 remaining in the petty cash box. Emelin sorted the petty cash

receipts by accounts affected and exchanged them for a check to reimburse the fund for expenses.

30 The petty cash fund is decreased by $100.00 to a total of $400.00

Required

1: Prepare the journal entry to establish the petty cash fund.

2: Prepare petty cash payments report for August with these categories: delivery expense, entertainment 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 part 2 to both (a) reimburse and (b) decrease the amount in the fund.