Question

Problem 8-3A Establishing, reimbursing, and increasing petty cash LO P2 Nakashima Gallery had the following petty cash transactions in February of the current year. Feb. 2 Wrote a $360 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 $14.55 that is imune di ately used. 9 Paid $32. 50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory. 12 Paid $6.95 post age to express mail a contract to a client. 14 Reimbursed Adina Sharon, the manager, $68 for business mileage on her car. 20 Purchased stationery for $68. Il that is 1mediately used to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $11.40 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. 27 Paid $58 for postage expenses. 28 The fund had $22. 45 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 $120 to a total of $480. 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. 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

Debit Credit Part 1: Date General Journal Feb-02 Petty cash Cash 360 360 24.00 Credit 68.00 Part 3 Date General Journal Feb-28 Delivery expense Mileage expense Postage expense Merchandise inventory Office supplies expense Cash over and short (337.55-284.17) Cash (360-22.45) Debit 24.00 68.00 64.95 43.90 83.32 53.38 Part 2: Nakashima Gallery petty cash payments report for February Delivery expense Feb-23 Delivery of customers merchandise Mileage expense Feb-14 reimbursement of mileage Postage expense Feb-12 express delivery of contract Feb-27 purchased postage stamps merchandise inventory (transportation in) Feb-09 COD charges on purchases Feb-25 COD charges on purchases office supplies expense Feb-05 purchased paper for copier Feb-20 purchased stationery Total 6.95 58.00 64.95 32.50 11.40 43.90 337.55 14.55 68.77 120 Feb-28 Petty cash Cash 83.32 284.17 - 120 + Sheet452 Sheet453 Sheet454 Sheet455 Sheet456 Sheet457 Sheet458 Sheet459 Sheet460 1 > - ll ENG UK 12:49 27/10/2019