On July 1, 2014, Acting Company established an imprest (petty cash) fund in the amount of $800.00 in cash from a check drawn for the purpose of establishing the fund. On July 31, the petty cash fund has cash of $62.84 and the following receipts on hand: for merchandise received, $408.60; freight-in, $131.48; laundry service, $168.00; and miscellaneous expense, $29.08. A check was drawn to replenish the fund.
On Aug. 31, the petty cash fund has cash of $110.00 and the following receipts on hand: merchandise, $393.68; freight-in, $152.60; laundry service, $168.00; and miscel- laneous expense, $15.72. The petty cash custodian is not able to account for the excess cash in the fund. A check is drawn to replenish the fund.
Required:
1. Prepare the journal entries necessary to record each of these transactions. The company uses the periodic inventory system.
2. What are two examples of why a local semiprofes- sional baseball team might have need for an imprest (petty cash) system?