Problem 7-2A Establishing, reimbursing, and increasing the petty cash fund LO4 Halifax Fitness Consulting completed the following petty cash transactions during February 2023: Feb. 2 Prepared a $360 cheque, cashed it, and gave the proceeds and the petty cash box to Nick Reed, the petty cashier. Purchased paper for the copier, $22 Paid $38 COD charges on merchandise purchased for resale. Assume Halifax Fitness Consulting uses the perpetual method to account for merchandise inventory. Paid $17 postage to express mail a contract to a client. Reimbursed Kim Marin, the manager of the business, $148 for business auto expenses. 5 9 Page 568 12 14 20 23 25 28 28 Purchased stationery, $65. Paid a courier $8 to deliver merchandise sold to a customer. Paid $20 COD charges on merchandise purchased for resale. Paid $24 for stamps. 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 expense, 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.

Problem 7-2A Establishing, reimbursing, and increasing the Page 568 petty cash fund LO4 Halifax Fitness Consulting completed the following petty cash transactions during February 2023: Required 1. Prepare a journal entry to record establishing the petty cash fund. 2. Prepare a summary of petty cash payments, similar to has these categories: delivery expense, 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