Question

Problem 6-3A Establishing, reimbursing, and increasing petty cash LO P2

Nakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory.

Feb.		2		Wrote a $340 check to establish a petty cash fund.
		5		Purchased paper for the copier for $16.15 that is immediately used.
		9		Paid $40.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory.
		12		Paid $7.75 postage to deliver a contract to a client.
		14		Reimbursed Adina Sharon, the manager, $70 for mileage on her car.
		20		Purchased office paper for $68.77 that is immediately used.
		23		Paid a courier $23 to deliver merchandise sold to a customer, terms FOB destination.
		25		Paid $11.10 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory.
		27		Paid $56 for postage expenses.
		28		The fund had $25.49 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.
		28		The petty cash fund amount is increased by $70 to a total of $410.

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.
Problem 6-3A Establishing, reimbursing, and increasing petty cash LO P2 Nakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory. Feb. 2 Wrote a $340 check to establish a petty cash fund. 5 Purchased paper for the copier for $16.15 that is immediately used. 9 Paid $40.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 12 Paid $7.75 postage to deliver a contract to a client. 14 Reimbursed Adina Sharon, the manager, $70 for mileage on her car. 20 Purchased office paper for $68.77 that is immediately used. 23 Paid a courier $23 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $11.10 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 27 Paid $56 for postage expenses. 28 The fund had $25.49 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. 28 The petty cash fund amount is increased by $70 to a total of $410. 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 is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entry to establish the petty cash fund. No Date General Journal Credit Debit 340 Feb 02 Petty cash Cash 340 Required 1 Required 2 >

Answer 1

3.

Date	General Journal	Debit	Credit
Feb. 28	Delivery expense	23.00
	Mileage expense	70.00
	Postage expense	63.75
	Merchandise inventory	51.60
	Office supplies expense	84.92
	Cash short or over	21.24
	Cash		314.51
	(To record reimbursement of the petty cash fund)
Feb. 28	Petty cash	70.00
	Cash		70.00
	(To record the increase of the petty cash fund)