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Item $1$

Exercise $6-10($Algo$)$ Petty cash fund accounting LO P$2$

Palmona Company establishes a $$290$ petty cash fund on January $1.$ On January $8,$ the fund shows $$181$ in cash along with receipts for the following expenditures: postage, $$48$; transportation$-$in$,$ $$11$; delivery expenses, $$13$; and miscellaneous expenses, $$37.$ Palmona uses the perpetual system in accounting for merchandise inventory.

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

Prepare the entry to reimburse the fund on January $8$ under two separate situations:

To reimburse the fund.

To reimburse the fund and increase it to $$340.$ Hint: Make two entries.