Wild 22nd Edition Problem 8-3A. Nakashima Gallery had the following petty cash t

Question

Wild 22nd Edition Problem 8-3A.

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

Feb. 2 Wrote a $400 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier

Feb. 5 Purchased bond paper for the copier for $14.15 that is immediately used.

Feb. 9 Paid $32.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory.

Feb. 12 Paid $7.95 postage to express mail a contract to a client.

Feb. 14 Reimbursed Adina Sharon, the manager, $68 for business mileage on her car.

Feb. 20 Purchased stationery for $67.77 that is immediately used.

Feb. 23 Paid a courier $20 to deliver merchandise sold to a customer, terms FOB destination.

Feb. 25 Paid $13.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point.

Feb. 27 Paid $54 for postage expenses.

Feb. 28 The funds had $120.42 remaining in the petty cash box. Sorted the petty cash receipts by account affected and exchanged them for a check to reimburse the fund for expenditures.

Feb. 28 The petty cash fund amount is increased by $100 to a total of $500.

Required

1. Prepare the journal entry to establish the petty cash fund.

2. Prepare a petty cash payment 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 (in dollars and cents) for part 2 to both (a) reimburse and (b) increase the fund amount.

Explanation / Answer

Answer:1 Prepare the journal entry to establish the petty cash fund :

Feb. 2 Wrote a $400 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier

Dr Petty cash 400
Cr Cash 400

Answer:2

Answer:3

28 Feb

Mileage Expense A/C Dr. $68

Merchandise inventory A/C Dr. $45.60

Delivery expense A/C Dr. $20

Office supplies expense A/C Dr. $81.92

Postage expense A/C Dr. $61.95

Cash over and short A/C Dr. $2.11

         To cash A/C                                                       $279.58

28 feb Petty cash A/C Dr. $100

                      To cash A/C                $100

     

Nakashima Gallery Petty cash payment report (For February) Delivery Expense 23-Feb Delivery of customer's merchandise $20 Mileage expense 14-Feb Reimbursement for mileage $68 Postage expense 12-Feb Express delivery of contract $7.95 27-Feb Purchased postage stamps $54.00 $61.95 Merchandise inventory (transportation-in) 9-Feb COD charges on purchases $32.50 25-Feb COD charges on purchases $13.10 $45.60 Office supplies expense 5-Feb Purchased paper for copier $14.15 20-Feb Purchased stationery $67.77 $81.92 Total $277.47

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