Bash Salad Dressings creates a petty cash fund with an imprest balance

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P7-30A Accounting for petty cash transactions [20–30 min]

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:

Petty Cash Ticket Number
101 office supplies $15
102 Cab fare for exercise 10

so on ...

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 custodian does.