Accounting for petty cash transactions On September 1, Party Salad Dressings creates a petty cash fund with an imprest balance of $600. During September, Michael Martell, the fund custodian, signs the following petty cash tickets: pretty Cash Ticket No items Amount 101 Office supplies 60$ 102 Cab Fare of executive 25 103 Delivery of package accross town 45 104 Business dinner 55 105 Merchandise inventory 75 On September 30, prior to replenishment, the fund contains these tickets plus cash of $355. The accounts affected by petty cash payments are Office Supplies, Travel Expense, Delivery Expense, Entertainment Expense, and Merchandise Inventory. Requirements Explain the characteristics and the internal control features of an imprest fund. On September 30, how much cash should the petty cash fund hold before it is replenished? Journalize all required entries to create the fund and replenish it. Include explanations. Make the October 1 entry to increase the fund balance to $800. Include an explanation and briefly describe what the custodian does.
Accounting for petty cash transactions
On September 1, Party Salad Dressings creates a petty cash fund with an imprest balance of $600. During September, Michael Martell, the fund custodian, signs the following petty cash tickets:
pretty Cash Ticket No items Amount
101 Office supplies 60$
102 Cab Fare of executive 25
103 Delivery of package accross town 45
104 Business dinner 55
105 Merchandise inventory 75
On September 30, prior to replenishment, the fund contains these tickets plus cash of $355. The accounts affected by petty cash payments are Office Supplies, Travel Expense, Delivery Expense, Entertainment Expense, and Merchandise Inventory.
Requirements
- Explain the characteristics and the internal control features of an imprest fund.
- On September 30, how much cash should the petty cash fund hold before it is replenished?
- Journalize all required entries to create the fund and replenish it. Include explanations.
- Make the October 1 entry to increase the fund balance to $800. Include an explanation and briefly describe what the custodian does.
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