Reference no: EM132818102

Valley Hardware (Mr. M. Jordan is the sole proprietor) established a petty cash fund on January 1, 2018. A cheque for $400 payable to cash was given to Kate, the petty cashier, who went to the bank and brought back $400 and put it in the petty cash box. The following transactions were completed during January.

1. Jan 1 Purchased business cards for $36 (this business records office supplies as expenses upon purchase)
2. Jan 10 Paid $60 for repairs to the office photocopier
3. Jan 15 Paid $66 COD charges on merchandise to be resold to customers (the business uses the periodic inventory system)
4. Jan 15 Purchased paper for the printer, $37
5. Jan 20 Paid $45 for an advertisement in the local January newspaper
6. Jan 25 M. Jordan took $90 from the cash box to pay for a personal gift for his mother
7. Jan 26 Paid $40 delivery charges on merchandise inventory sold to a customer
8. Jan 28 Paid $16 for stamps used for mailing cheques to its suppliers.
9. The money in the petty cash box was counted on January 31, and its total was $12. The fund was replenished and increased by $100 on January 31.

REQUIRED:

Problem A. Prepare the journal entry to record the establishment of the petty cash fund.

Problem B. Prepare a summary of petty cash payments (also known as the Petty Cash Payments Report) for January. Choose the general ledger accounts that you require to complete the report.

Problem C. Prepare the journal entry to record the reimbursement of the petty cash fund, and to increase the size of the fund by $100.00