On June 1, Fab Salad Dressings creates a petty cash fund with an imprest balance of $300. During June, Al Franklin, the fund custodian, signs the following petty cash tickets:

On June 30, prior to replenishment, the fund contains these tickets plus cash of $90. The accounts affected by petty cash payments are Office Supplies, Travel Expense, Delivery Expense, Entertainment Expense, and Merchandise Inventory.
Requirements
1. Explain the characteristics and the 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. Journalize all required entries to create the fund and replenish it. Include explanations.
4. Make the July 1 entry to increase the fund balance to $375. Include an explanation and briefly describe what the custodian does.
 

Transcribed Image Text:

Petty Cash Ticket Number 101 102 103 104 105 Item Office supplies Cab fare for executive Delivery of package across town Business dinner Merchandise inventory Amount $ 30 20 50 40 90 Petty Cash Ticket Number 101 102 103 104 105 Item Office supplies Cab fare for executive Delivery of package across town Business dinner Merchandise inventory Amount $ 30 20 50 40 90

Answer rating: 100% (QA)

Complete required solution is given below A imprest fund has a same balance Note1 at all times which ... View the full answer