Question

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 $14.95 that is immediately used.
		9		Paid $44.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory.
		12		Paid $7.55 postage to express mail a contract to a client.
		14		Reimbursed Adina Sharon, the manager, $65 for business mileage on her car.
		20		Purchased stationery for $68.77 that is immediately used.
		23		Paid a courier $15 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 $53 for postage expenses.
		28		The fund had $24.44 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 $110 to a total of $450.

Required:
1. 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.

Required 1

Required 2

Required 3

Prepare the journal entry to establish the petty cash fund.

Journal entry worksheet

Wrote a $340 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Feb 02

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. (Round your answers to 2 decimal places.)

NAKASHIMA GALLERY
Petty Cash Payments Report (for February)
Delivery expense
Mileage expense
Postage expense
			0.00
Merchandise inventory (transportation-in)
			0.00
Office supplies expense
			0.00
Total

Prepare the journal entries for required 2 to both (a) reimburse and (b) increase the fund amount. (Round your answers to 2 decimal places.)

Journal entry worksheet

Record the reimbursement of the petty cash fund.

Record the increase of the petty cash fund.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Feb 28

Answer 1

Date	General Journal	Debit	Credit
02-Feb	Petty cash	340.00
	Cash		340.00
NAKASHIMA GALLERY
Petty Cash Payments Report (for February)
Delivery expense
23-Feb	Delivery of customer's merchandise		15.00
Mileage expense
14-Feb	Reimbursement for mileage		65.00
Postage expense
12-Feb	Express delivery of contract	7.55
27-Feb	Purchased postage stamps	53.00	60.55
Merchandise inventory (transportation-in)
09-Feb	COD charges on purchases	44.50
25-Feb	COD charges on purchases	11.10	55.60
Office supplies expense
05-Feb	Purchased paper for copier	14.95
20-Feb	Purchased stationery	68.77	83.72
Total			279.87

Date	General Journal	Debit	Credit
28-Feb	Delivery expense	15.00
	Mileage expense	65.00
	Postage expense	60.55
	Merchandise inventory	55.60
	Office supplies expense	83.72
	Cash over and short	35.69
	Cash 340-24.44		315.56
28-Feb	Petty cash	110.00
	Cash		110.00