Suppose that, on June 1, Devine Design creates a petty cash fund with an imprest balance of
Question:
On June 30, prior to replenishment, the fund contains these tickets plus $17.20. The accounts affected by petty cash payments are Office Supplies Expense, Travel Expense, Delivery Expense, and Entertainment Expense.
Required
1. Explain the characteristics and internal control features of an imprest fund.
2. On June 30, how much cash should the petty cash fund hold before it is replenished?
3. Make general journal entries to (a) create the fund and (b) replenish it. Include explanations.
4. Make the July 1 entry to increase the fund balance to $250. Include an explanation, and briefly describe what the custodian does in this case.
Step by Step Answer:
Accounting Volume 1
ISBN: 978-0132690096
9th Canadian edition
Authors: Charles T. Horngren, Walter T. Harrison, Jo Ann L. Johnston, Carol A. Meissner, Peter R. Norwood