Beard Gallery had the following petty cash transactions in February of the current year.
Feb. 2 Wrote a $300 check, cashed it, and gave the proceeds and the petty cashbox to Reggie Gore, the petty cashier.
5 Purchased bond paper for the copier for $14.55 that is immediately used.
9 Paid $32.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Beard uses the perpetual system to account for merchandise inventory.
12 Paid $7.85 postage to express mail a contract to a client.
14 Reimbursed Jonny Carr, the manager, $66 for business mileage on her car.
20 Purchased stationery for $67.67 that is immediately used.
23 Paid a courier $23 to deliver merchandise sold to a customer, terms FOB destination.
25 Paid $10.30 COD shipping charges on merchandise purchased for resale, terms FOB shipping point.
27 Paid $55 for postage expenses.
28 The fund had $20.82 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 $100 to a total of $400.
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 part 2 to both (a) reimburse and (b) increase the fund amount.