Nakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory.
February 2 Wrote a $340 check to establish a petty cash Fund.
February Purchased paper for the copier for $15.55 that is immediately used.
February 9 Paid $44.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory.
February 12 Paid $7.85 postage to deliver a ver a contract to a client.
February 14 Reimbursed Adina Sharon, the manager, er, $66 for mileage on her car.
February 28 Purchased office paper for $68.77 that is immediately used. February
23 Paid a courier $25 to deliver merchandise sold to a customer, terms FOB destination.
February 25 Paid $11.80 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory.
February 27 Paid 360 for postage expenses
February 28 The fund had $22.82 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.
February 28 The petty cash fund amount is increased by $120 to a total of 3460.
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

Answer rating: 100% (QA)

1 Journal entry to establish the petty cash fund on February 2 February ... View the full answer