Problem 7-21 Establishing, reimbursing, and increasing the petty cash fund LO4 Halifax Fitness Consulting completed the following petty cash transactions during February 2020: 5. Catherine Young records all incoming customer cash receipts for her 2 Prepared a $360 cheque, cashed it, and gave the proceeds and the petty cash box to Nick Reed, the petty the company has not bonding insurance premium by dropping the bone tomer payments to their accounts. Feb. cashier 5 Purchased paper for the copier, $22 9 Paid $38 COD charges on merchandise purchased for resale. Assume Halifax Fitness Consulting uses the perpetual method to account for merchandise inventory. 12 Paid $17 postage to express mail a contract to a client. 14 Reimbursed Kim Marin, the manager of the business, $148 for business auto expenses. 20 Purchased stationery, $65. 23 Paid a courier $8 to deliver merchandise sold to a customer. 25 Paid $20 COD charges on merchandise purchased for resale. 28 Paid $24 for stamps. 28 Reed sorted the petty cash receipts by accounts affected and exchanged them for a cheque to reimburse the fund for expenditures. However, there was only $11 in cash in the fund. In addition, the size of the petty cash fund was increased to $500 Required 1. Prepare a journal entry to record establishing the petty cash fund. 2. Prepare a summary of petty cash payments, similar to Exhibit 7.3 that has these categories: delivery ex- pense, auto expense, postage expense, merchandise inventory, and office supplies. Sort the payments into the appropriate categories and total the expenditures in each category. 3. Prepare the journal entry to record the reimbursement and the increase of the fund