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. Nakashima uses the perpetual system to account for merchandise inventory Feb. 2 Wrote a $350 check to establish a petty cash fund. 5 Purchased paper for the copier for $16.55 that is inmediately used. 9 Paid $38.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 12 Poid 58.85 postage to deliver a contract to a client. 14 Reimbursed Adina Sharon, the manager, $66 for mileage on her car. 20 Purchased office paper for $67.77 that is immediately used. 23 Paid a courier $16 to deliver merchandise sold to a customer, terms FOB destination 25 Paid $10.80 shipping charges (transportation-in) on merchandise purchased for resale, teras FOB shipping point. These costs are added to merchandise inventory. 27 Paid $53 for postage expenses. 28 The fund had $26.00 remaining in the petty cashbox. Sorted the petty cash receipts by accounts affected and exchanged them for a check to reimburse the fund for expenditures. 28 The petty cash fund amount is increased by $70 to a total of $420. Required: 1. Prepare the journal entry to establish the petty cash fund. 2. 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. 3. Prepare the journal entries for required 2 to both (a) reimburse and (b) increase the fund amount. Required 1 Required 2 Required 3 Prepare the journal entry to establish the petty cash fund. No Date General Journal Debit Credit 1 Feb 02 Petty cash Cash 400 400 & 20.00 68.00 NAKA SHIMA GALLERY Petty Cash Payments Report (for February) Delivery expense Feb. 23 Delivery of customer's merchandise Mileage expense Feb. 14 Reimbursement for mileage Postage expense Feb. 12 Express delivery of contract $ 7.95% Feb. 27 Purchased postage stamps 54.00 Merchandise inventory (transportation-in) Feb. 9 Shipping charges on purchases 32.50 Feb 25 Shipping charges on purchases 13.10 X Office supplies expense Feb. 5 Purchased paper for copier 14.15 % Feb. 20 Purchased postage stamps 67.77 61.95 45.60 81.92 $ 277.47 Total Required 1 Required 2 Required 3 Prepare the journal entries for required 2 to both (a) reimburse and (b) increase the fund amount. (Round your answers to 2 decimal places.) No Date General Journal Debit Credit 1 Feb 28 Mileage expense Merchandise inventory Delivery expense Office supplies expense Postage expense Cash over and short Cash Petty cash Cash 68.00 45.60 20.00 81.92 61.95% 2.11 279.58 100.00 100.00