Prada co established a petty cash fund to help ensure internal control over its small expenditures. The following are the transactions affecting the petty cash fund for the month of May 2020

1. On May 2, the company established petty cash fund of P8,000
2. The following were paid from May 2 to 20.
   • Freight merchandise purchases P 2,500
   • Freight on nerchandise sold 3,000
   • Supplies purchased 800
   • IOUs from employees 1,200
3. On May 18 the employee paid their IOUs granted on May 10 indicated above. Proceeds were returned to petty cash fund.
4. On May 20 the petty fund was replenished
5. Payments from petty cash fund from May 20 through May 31 are as follows
   • Freight on merchandise purchases P1,200
   • Transportation 150
   • Medicines for employees 320
   • IOUs from employees 500
6. A count of fund on May 31 revealed bills and coins in the fund amounting to P5,700. Reporting date is May 31.

Required:

1. Is there any shortage of the fund?
2. Prepare journal entries for the above transactions including adjustments on May 31.
3. Please indicate comments on the accounting procedure for petty cash and recommendations that you may suggest.