Problem 6-3B Establishing, reimbursing, and increasing petty cash P2

Blues Music Center had the following petty cash transactions in March of the current year.

March 5

Wrote a $250 check, cashed it, and gave the proceeds and the petty cashbox to Jen Rouse, the petty cashier.

6

Paid $12.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Blues uses the perpetual system to account for merchandise inventory.

11

Paid $10.75 in delivery expense on merchandise sold to a customer, terms FOB destination.

12

Purchased office file folders for $14.13 that are immediately used.

14

Reimbursed Bob Geldof, the manager, $11.65 for office supplies purchased and used.

18

Purchased office printer paper for $20.54 that is immediately used.

27

Paid $45.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point.

28

Paid postage expense of $18.

30

Reimbursed Geldof $56.80 for mileage expense.

31

Cash of $61.53 remained in the fund. Sorted the petty cash receipts by accounts affected and exchanged them for a check to reimburse the fund for expenditures.

31

The petty cash fund amount is increased by $50 to a total of $300.

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. Sort the payments into the appropriate categories and total the expenses in each category.

Check (2) Total expenses, $189.47

3. Prepare the journal entries (in dollars and cents) for part 2 to both (a) reimburse and (b) increase the fund amount.

(3a & 3b) Total Cr. to Cash, $238.47