Question

Music City Center had the following petty cash transactions in March of the current year.
March 5 Wrote a $300 check, cashed it, and gave the proceeds and the petty cashbox to Abby Rode, the petty cashier.
6 Paid $16.75 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Music City uses the perpetual system to account for merchandise inventory.
11 Paid $44.50 delivery charges on merchandise sold to a customer, terms FOB destination.
12 Purchased file folders for $7.95 that are immediately used.
14 Reimbursed Alys Mingle, the manager, $68 for office supplies purchased and used.
18 Purchased printer paper for $20 that is immediately used.
27 Paid $11.60 COD shipping charges on merchandise purchased for resale, terms FOB shipping point.
28 Paid postage expenses of $60.
30 Reimbursed Mingle $56.80 for business car mileage.
31 Cash of $16.81 remained in the fund. Sorted the petty cash receipts by accounts affected and exchanged them for a check to reimburse the fund for expenditures.
31 The petty cash fund amount is increased by $50 to a total of $350.
Required
1. Prepare the journal entry to establish the petty cash fund.
2. Prepare a petty cash payments report for March 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 expenses in each category.
3. Prepare the journal entries for part 2 to both (a) reimburse and (b) increase the fund amount.


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  • CreatedMarch 18, 2015
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