Problem 7-2A Establishing, reimbursing, and increasing the petty cash fund 104 Halifax Fitness Consulting completed the following petty cash transactions during February 2020: Feb 14 2. Prepared a $360 cheque, cashed it, and gave the proceeds and the peny cmn box to Neck Reed, the petry cashier 5 Purchased paper for the coplec 522 9 Paid $38 COD charges on merchandise purchased for resale. Assume Helfer Finness Consuting uses the perpetual method to account for merchandise inventory 12 Paid $17 postage to express mail a contract to a client Reimbursed Kim Marin, the manager of the business, $148 for business sits expenses. 20 Purchased stationery, $65 23 Pald a courier $8 to dellver 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 $11an cast in the fund. In addition, the size of the petty cash hand 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. 514 514 Reader Contents Notebook Bookmarks Flashcards Analysis Component: One of your responsibilities as an employee with Halifax Fitness is to handle the petty cash fund. You are concerned about the auto expense claims made regularly by Kim Marin, the manager who hired you: Kim tells you how much the expenditures are and you give her the cash out of petty cash. Kim has never given you receipts to substantiate her claims. The owner of the business is visiting and asks you how things are going. What should you do, if anything? Explain