On June 1, Bash Salad Dressings creates a petty cash fund with an imprest balance of $450. 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 $310. The accounts affected by petty cash payments are Office supplies expense, Travel expense, Delivery expense, Entertainment expense, and 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 $475. Include an explanation, and briefly describe what the custodiandoes.

Transcribed Image Text:

Petty Cash Ticket Number Item Amount $ 15 Office supplies Cab fare for executive 101 102 10 103 Delivery of package across town Dinner money for city manager to entertain the mayor 20 104 35 Inventory 105 65