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 $14.95 that is immediately used.
		9		Paid $32.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory.
		12		Paid $7.85 postage to deliver a contract to a client.
		14		Reimbursed Adina Sharon, the manager, $67 for mileage on her car.
		20		Purchased office paper for $68.77 that is immediately used.
		23		Paid a courier $24 to deliver merchandise sold to a customer, terms FOB destination.
		25		Paid $10.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory.
		27		Paid $58 for postage expenses.
		28		The fund had $25.02 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 $90 to a total of $440.

• Required 1
• Required 2
• Required 3

Prepare the journal entry to establish the petty cash fund.

Journal entry worksheet

• Wrote a $350 check to establish a petty cash fund.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Feb 02

• Required 1
• Required 2
• Required 3

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. (Round your answers to 2 decimal places.)

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 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. (Round your answers to 2 decimal places.)

NAKASHIMA GALLERY
Petty Cash Payments Report (for February)
Delivery expense
Mileage expense
Postage expense
Merchandise inventory (transportation-in)
Office supplies expense
Total

Prepare the journal entries for required 2 to both (a) reimburse and (b) increase the fund amount. (Round your answers to 2 decimal places.)

Journal entry worksheet

• Record the reimbursement of the petty cash fund.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Feb 28