on june 1, fab seed company creates a petty - cash fund with an imprest balance of $500. during june, ruth…

on june 1, fab seed company creates a petty - cash fund with an imprest balance of $500. during june, ruth mangan, the fund custodian, signs the following petty - cash tickets: on june 30, prior to replenishment, the fund contains these tickets plus cash of $110. the accounts affected by petty - cash payments are supplies, travel expense, delivery expense, entertainment expense, and merchandise inventory.\nrequirement 1. explain the characteristics and the internal - control features of an imprest fund.\nan imprest fund has the same balance at all times, which equals the sum of cash in the fund plus the total of the tickets that support payments from the fund. the internal - control feature of an imprest fund is that it clearly identifies the amount of money for which the fund custodian is responsible.\nrequirement 2. on june 30, how much cash should the petty - cash fund hold before it is replenished?\nbefore it is replenished, the petty - cash fund should hold cash of $ \nrequirement 3. journalize all required entries to create the fund and replenish it. include explanations. (record debits first, then credits. select the explanation on the last line of the journal entry table.)\nbegin by journalizing the creation of the fund.\ndate accounts and explanation debit credit\njune 1

on june 1, fab seed company creates a petty - cash fund with an imprest balance of $500. during june, ruth mangan, the fund custodian, signs the following petty - cash tickets: on june 30, prior to replenishment, the fund contains these tickets plus cash of $110. the accounts affected by petty - cash payments are supplies, travel expense, delivery expense, entertainment expense, and merchandise inventory.\nrequirement 1. explain the characteristics and the internal - control features of an imprest fund.\nan imprest fund has the same balance at all times, which equals the sum of cash in the fund plus the total of the tickets that support payments from the fund. the internal - control feature of an imprest fund is that it clearly identifies the amount of money for which the fund custodian is responsible.\nrequirement 2. on june 30, how much cash should the petty - cash fund hold before it is replenished?\nbefore it is replenished, the petty - cash fund should hold cash of $ \nrequirement 3. journalize all required entries to create the fund and replenish it. include explanations. (record debits first, then credits. select the explanation on the last line of the journal entry table.)\nbegin by journalizing the creation of the fund.\ndate accounts and explanation debit credit\njune 1

Answer

Explanation:

Step1: Identify the imprest balance

The imprest balance of the petty - cash fund is $500.

Step2: Determine the cash remaining

On June 30, the fund contains cash of $110.

Step3: Calculate the amount to replenish

The amount to replenish is the difference between the imprest balance and the cash remaining. So, $500−$110 = $390.

Step4: Journalize the creation of the fund

On June 1, to create the petty - cash fund: Debit Petty Cash $500 Credit Cash $500 Explanation: Establishing the petty - cash fund.

Step5: Journalize the replenishment of the fund

Debit Supplies $40 Debit Travel Expense (Cab fare) $25 Debit Delivery Expense $20 Debit Entertainment Expense (Business dinner) $95 Debit Merchandise Inventory $140 Credit Cash $390 Explanation: Replenishing the petty - cash fund and recording expenses and inventory.

Answer:

Requirement 1: An imprest fund has a fixed balance at all times, which equals the sum of cash in the fund plus the total of the tickets that support payments from the fund. The internal control feature is that it clearly identifies the amount of money for which the fund custodian is responsible. Requirement 2: $390 Requirement 3:

Date Accounts and Explanation Debit Credit
June 1 Petty Cash $500
Cash $500
(Establishing the petty - cash fund)
June 30 Supplies $40
Travel Expense $25
Delivery Expense $20
Entertainment Expense $95
Merchandise Inventory $140
Cash $390
(Replenishing the petty - cash fund and recording expenses and inventory)