(L. OBJ. 9) Accounting for petty cash transactions [20—30 min] On November 1, Fab Salad...

(L. OBJ. 9) Accounting for petty cash transactions [20—30 min]

On November 1, Fab Salad Dressings creates a petty cash fund with an imprest balance of $400. During November, Sunny Lewis, the fund custodian, signs the following petty cash tickets:

On November 30, prior to replenishment, the fund contains these tickets plus cash of $245. The accounts affected by petty cash payments are Office supplies expense, Travel expense, Deli very expense, Entertainment expense, and Inventory.

Requirements

1. Explain the characteristics and the internal control features of an imprest fund.

2. On November 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 December 1 entry to increase the fund balance to $450. Include an explanation, and briefly describe what the custodian does.