Problem 8-3A Establishing, reimbursing, and increasing petty cash LO P2

Nakashima Gallery had the following petty cash transactions in February of the current year.

Feb.2Wrote a $340 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier.5Purchased bond paper for the copier for $15.15 that is immediately used.9Paid $40.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory.12Paid $7.85 postage to express mail a contract to a client.14Reimbursed Adina Sharon, the manager, $72 for business mileage on her car.20Purchased stationery for $68.77 that is immediately used.23Paid a courier $25 to deliver merchandise sold to a customer, terms FOB destination.25Paid $11.60 COD shipping charges on merchandise purchased for resale, terms FOB shipping point.27Paid $51 for postage expenses.28The fund had $25.57 remaining in the petty cash box. Sorted the petty cash receipts by accounts affected and exchanged them for a check to reimburse the fund for expenditures.28The petty cash fund amount is increased by $120 to a total of $460.

Required:

1.How do I create a journal entry to establish the petty cash fund.

2.how to prepare a petty cash payments report for February 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 expenditures in each category.

3.Prepare the journal entries for required 2 to both (a) reimburse and (b) increase the fund amount.