A surprise count of the \(Y\) Company's imprest petty cash fund, carried on the books at \(\$ 5,000\) was made on November \(10,19 X 0\).

The company acts as agent for an Express Company in the issuance and sale of money orders. Blank money orders are held by the cashier for issuance upon payments of the designated amounts by employees. Settlement with the Express Company is made weekly with its representative who calis at the \(Y\) Company office. At that time he collects for orders issued, accounts for unissued orders, and leaves additional blank money orders serially numbered.

At the time of the count there was also on hand the following:
Unissued money orders \#C1028-1037.
Unclaimed wage envelopes (sealed and amounts not shown).
The following day the custodian of the fund produced vouchers aggregating \(\$ 400\) and explained that these vouchers had been temporarily misplaced the previous day. They were ior wage advances to employees.
Required:

a. Show the proper composition of the fund at November 10, 19X0.

b. State the audit procedures necessary for the verification of the items in the fund.

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The items presented by the cashier as composing the fund were: Currency (bills and coin) Cashed checks .... Vouchers (made out in pencil and signed by recipient)...... N.S.F. checks (dated June 10 and 15, 19X0) Copy of petty cash receipt vouchers: Return of expense advance.... Sale of money orders (#C1015-1021).. Blank money orders-claimed to have been pur- chased for $100 each from the Express Company (#C1022 to 1027)..... $2,200 500 740 260 $200 100 300 600