Cameron Co$.$ established a $$188$ petty cash fund on January $1,2023.$ One week later, on January $8,$ the fund contained $$36\mathrm{.}47$ in cash and receipts for these expenditures: postage, $$52\mathrm{.}64$; transportation$-$in$,$ $$33\mathrm{.}84$; store supplies, $$41\mathrm{.}11$; and a withdrawal of $$23\mathrm{.}94$ by Jim Cameron, the owner. Cameron uses the perpetual method to account for merchandise inventory.

a$.$ Prepare the journal entry to establish the fund on January $1.$

b$.$ Prepare a summary of the petty cash payments and record the entry to reimburse the fund on January $8.($Round your answers to $2$ decimal places.$)$

Analysis Component:

If the January $8$ entry to reimburse the fund were not recorded and financial statements were prepared for the month of January, would profit be over$-$ or understated?

multiple choice

Overstated

Understated