Question

Nakashima Gallery had the following petty cash transactions in February of the current year. Feb. 2...

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 $16.55 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 $7.15 postage to express mail a contract to a client. 14 Reimbursed Adina Sharon, the manager, $69 for business mileage on her car. 20 Purchased stationery for $67.77 that is immediately used. 23 Paid a courier $22 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $11.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. 27 Paid $55 for postage expenses. 28 The fund had $25.97 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 $130 to a total of $490. 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.

Homework Answers

Answer #1

Part-1)

Debit

Credit

Feb-02

Petty cash

360

Cash

360

Part-2)

Petty Cash Payments Report

Delivery expenses

Feb-23

Delivery of customer's merchandise

22

Mileage expenses

Feb-14

Reimbursement for mileage

69

Postage expenses

Feb-12

Express delivery of contract

7.15

Feb-27

Purchased postage stamps

55

62.15

Merchandise inventory (transportation-in)

Feb-09

COD charges on purchases

40.5

Feb-25

COD charges on purchases

11.1

51.6

Office supplies expense

Feb-05

Purchased paper for copier

16.55

Feb-20

Purchased stationery

67.77

84.32

289.07

Part-3)

Debit

Credit

Delivery expense

22.00

Mileage expense

69.00

Postage expense

62.15

Merchandise inventory

51.60

Office supplies expense

84.32

Cash over and short

44.96

Cash

334.03

Petty cash

130.00

Cash

130.00

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