Nakashima Gallery had the following petty cash transactions

Nakashima Gallery had the following petty cash transactions in February of the current year Feb. 2 Wrote a $340 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier. 5 Purchased bond paper for the copier for $15.55 that is immediately used 9 Paid $30.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory 12 Paid $7.75 postage to express mail a contract to a client 14 Reimbursed Adina Sharon, the manager, $66 for business mileage on her car. 20 Purchased stationery for $68.77 that is immediately used. 23 Paid a courier $24 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $11.70 COD shipping charges on merchandise purchased for resale, terms FOB shipping point 27 Paid $59 for postage expenses 28 The fund had $23.86 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. 28 The petty cash fund amount is increased by $90 to a total of $430 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. 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. Complete this question by entering your answers in the tabs below

Solution

Creation of petty cash fund:

(Being cash withdrawn for petty cash expenses

and gave it to the Chloe addision)

Reimbursement of petty cash fund:

(Being petty cash fund replenished against the cash receipts in February)

[$340 - $23.86])

iIncrease in Petty cah fund:

Date	General Journal	Debit	Credit
Feb 02	Petty cash a/c	$340
	To Bank a/c		$340
	(Being cash withdrawn for petty cash expenses and gave it to the Chloe addision)