Nakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory. February 2 Wrote a $350 check to establish a petty cash fund.
February 5 Purchased paper for the copier for $15.95 that is immediately used.
February 9 Paid $32.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory.
February 12 Paid $8.35 postage to deliver a contract to a client.
February 14 Reimbursed Adina Sharon, the manager, $71 for mileage on her car.
February 20 Purchased office paper for $68.77 that is immediately used.
February 23 Paid a courier $20 to deliver merchandise sold to a customer, terms FOB destination.
February 25 Paid $10.30 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory.
February 27 Paid $59 for postage expenses.
February 28 The fund had $24.07 remaining in the petty cashbox.

Required:
a. Prepare the journal entry to establish the petty cash fund.
b. 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.