Problem: Nakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory.
February 2 Wrote a $340 check to establish a petty cash fund.
February 5 Purchased paper for the copier for $15.15 that is immediately used.
February 9 Paid $44.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory.
February 12 Paid $7.65 postage to deliver a contract to a client.
February 14 Reimbursed Adina Sharon, the manager, $73 for mileage on her car.
February 20 Purchased office paper for $68.77 that is immediately used.
February 23 Paid a courier $18 to deliver merchandise sold to a customer, terms FOB destination.
February 25 Paid $10.40 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory.
February 27 Paid $54 for postage expenses.
February 28 The fund had $22.26 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.
February 28 The petty cash fund amount is increased by $100 to a total of $440.
I need help with:
- recording the journal entry to establish the petty cash fund.
- recording 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.
- record the journal entries for required 2 to both (a) reimburse and (b) increase the fund amount.