Question

Nakashima Gallery had the following petty cash transactions in February of the current year Feb. 2 Wrote a $350 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier 5 Purchased bond paper for the copier for $14.95 that is immediately used. 9 Paid $40.50 coD shipping charges on merchandise purchased for resale, terms F08 shipping point. Nakashima uses the perpetual system to account for merchandise inventory. 12 Paid $7.55 postage to express mail a contract to a client. 14 Reimbursed Adina Sharon, the manager, $7e for business mileage on her car. 20 Purchased stationery for $68.77 that is immediately used. 23 Paid a courier $20 to deliver merchandise sold to a customer, terms FOB destination . 25 Paid $11.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. 27 Paid $58 for postage expenses. 28 The fund had $22.72 remaining in the petty cash box. 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 $156 to a total of $500. Required: 2 Prepare a pety caste Pretyuary wih hese categories delivery expense. mlceage expense, postage expense. 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 Sort the payments into the appropriate categories and total the expenditures in each category 3. Prepare the journal entries for required 2 to both (a) reimburse and (b) increase the fund amount

Answer 1

1) Journal entry

Date Account Debit Credit

Feb 2 Petty Cash A/c Dr $350

To Cash A/c $350

To Establish the petty cash of $350

2)Petty Cash Payment Report

Office Supply expense   

Feb 2 :Purchase : Paper for copier $14.95

Feb 20 Purchase : Stationary $68.77 $83.72

Merchandise inventory (Transportation in)

Feb. 9 COD Charges $ 40.50

Feb 25 Feb. 9 COD Charges $ 11.50 $52

Mileage Expense

Feb. 14 Reimbursement $70

Delivery Expenses

Feb. 23 Delivery of Merchandise $ 20

Postage Expense

Feb. 12Express Delivery Charges $7.55

Feb. 27Postage Stamps $58 $65.55

Total $291.27

3) Journal entry

Date Account Debit Credit

Feb 28   Mileage Expense $70

Delivery Expense $20

Postage Expense $65.55

Merchandise Inventory $52

Office Supplies Expense $83.72

Cash Over and Short $ 36.01

Petty Cash $150

To Cash 477.28

To reimburse and increase petty cash A/c