Blues Music Center had the following petty cash transactions in March of the current year. Blues uses the perpetual system to account for merchandise inventory. Mar. 5 Wrote a $250 check to establish a petty cash fund. 6 Paid $12.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 11 Paid $10.75 in delivery expense on merchandise sold to a customer, terms FOB destination. 12 Purchased office file folders for $14.13 that are immediately used. 14 Reimbursed Bob Geldof, the manager, $11.65 for office supplies purchased and used. 18 Purchased office printer paper for $20.54 that is immediately used. 27 Paid $45.10 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 28 Paid postage expense of $18. 30 Reimbursed Geldof $56.80 for mileage expense. 31 Cash of $61.53 remained in the fund. Sorted the petty cash receipts by accounts affected and exchanged them for a check to reimburse the fund for expenditures. 31 The petty cash fund amount is increased by $50 to a total of $300. Required 1. Prepare the journal entry to establish the petty cash fund. 2. Prepare a petty cash payments report for March with these categories: delivery expense, mileage expense, postage expense, merchandise inventory (for transportation-in), and office supplies expense. 3. Prepare the journal entries for part 2 to both (a) reimburse and (b) increase the fund amount.
Blues Music Center had the following petty cash transactions in March of the current year. Blues uses the
perpetual system to account for merchandise inventory.
Mar. 5 Wrote a $250 check to establish a petty cash fund.
6 Paid $12.50 shipping charges (transportation-in) on merchandise purchased for resale, terms
FOB shipping point. These costs are added to merchandise inventory.
11 Paid $10.75 in delivery expense on merchandise sold to a customer, terms FOB destination.
12 Purchased office file folders for $14.13 that are immediately used.
14 Reimbursed Bob Geldof, the manager, $11.65 for office supplies purchased and used.
18 Purchased office printer paper for $20.54 that is immediately used.
27 Paid $45.10 shipping charges (transportation-in) on merchandise purchased for resale, terms
FOB shipping point. These costs are added to merchandise inventory.
28 Paid postage expense of $18.
30 Reimbursed Geldof $56.80 for mileage expense.
31 Cash of $61.53 remained in the fund. Sorted the petty cash receipts by accounts affected and
exchanged them for a check to reimburse the fund for expenditures.
31 The petty cash fund amount is increased by $50 to a total of $300.
Required
1. Prepare the
2. Prepare a petty cash payments report for March with these categories: delivery expense, mileage
expense, postage expense, merchandise inventory (for transportation-in), and office supplies expense.
3. Prepare the journal entries for part 2 to both (a) reimburse and (b) increase the fund amount.
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