Question
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
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.)
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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 | ||||
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