P7-6B Suppose that on June 1. Alpha Audio-Video opens a district office in Omaha and cre- ates a petty cash fund with an imprest balance of $350. During June. Carol McColgin. fund custodian, signs the following petty cash tickets: Petty Cash Ticket Number Item Amount 1 Postage for package received $ 18.40 2 Decorations and refreshments for office party 13.19 3 Two boxes of floppy disks 20.82 4 Printer cartridges 27.13 5 6 7 Dinner money for sales manager entertaining a customer Plane ticket for executive business trip to Memphis Delivery of package across town 50.00 169.00 6.30 On June 30, prior to replenishment, the fund contains these tickets plus cash of $42.37. The accounts affected by petty cash payments are Office Supplies Expense. Travel Expense. Delivery Expense, Entertainment Expense, and Postage Expense. Required 1. Explain the characteristics and the internal control features of an imprest fund. 2. Make the general journal entries to

(a) create the fund and

(b) replenish it. Include explanations. Also, briefly describe what the custodian does on these dates. 3. Make the entry on July I to increase the fund balance to $500. Include an explanation, and briefly describe what the custodian does.