Reference no: EM132594091

Nakashima Gallery had the following petty cash transactions in February of the current year.

Feb. 2 Wrote a $340 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 $15.15 that is immediately used.

9 Paid $40.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory.

12 Paid $7.85 postage to express mail a contract to a client.

14 Reimbursed Adina Sharon, the manager, $72 for business mileage on her car.

20 Purchased stationery for $68.77 that is immediately used.

23 Paid a courier $25 to deliver merchandise sold to a customer, terms FOB destination.

25 Paid $11.60 COD shipping charges on merchandise purchased for resale, terms FOB shipping point.

27 Paid $51 for postage expenses.

28 The fund had $25.57 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 $460.

Required:

Question 1. How do create a journal entry to establish the petty cash fund.

Question 2. how to 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.

Question 3. Prepare the journal entries for required 2 to both (a) reimburse and (b) increase the fund amount.