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. 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.

Complete this question by entering your answers in the tabs below.

• 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	350
		Cash

Complete this question by entering your answers in the tabs below.

• 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
Feb. 23	Delivery of customer's merchandise		$16.00
Mileage expense
Feb. 14	Reimbursement for mileage		66.00
Postage expense
Feb. 12	Express delivery of contract	$8.85
Feb. 27	Purchased postage stamps	53.00	61.85
Merchandise inventory (transportation-in)
Feb. 9	Shipping charges on purchases	38.50
Feb. 25	Shipping charges on purchases	10.80	49.30
Office supplies expense
Feb. 5	Purchased office paper	16.55
Feb. 20	Purchased postage stamps	67.77	84.32
Total

Complete this question by entering your answers in the tabs below.

• 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	Delivery expense	16.00
		Mileage expense	55.00
		Postage expense	61.85
		Merchandise inventory	49.30
		Office supplies expense	84.32
		Cash over and short	46.53
		Cash