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Palmona Co. establishes a $280 petty cash fund on January 1. On January 8, the fund shows $163 in cash along with receipts for the following expenditures: postage, $49; transportation-in, $14; delivery expenses, $16; and miscellaneous expenses, $38. Palmona uses the perpetual system in accounting for merchandise inventory. Problem 1: Prepare journal entries to (1) establish the fund on January 1, (2) reimburse it on January 8, and (3) both reimburse the fund and increase it to $330 on January 8, assuming no entry in part 2. (Hint: Make two separate entries for part 3.)
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