investment and a bank loan, details of which are in additional data. 106,000 203, a) Customer's uncollectible check (NSF) P 100 10 pieces P Store fixtures (P50,000 - P5,000) 45, Dec. 23 Jay Ar, sales Savings deposit in a closed bank 150, Cash given to Roy, salesman 600 10, check no. P6,000). i. The following official receipts are all c. Adjusted cash in bank Postage stamps 1, 60, PROBLEM NO. 1. First thought that comes to mind, "if the client (had a whole year to figure this out) can't even tell me the cause how am I (have a few weeks)… d. The bank statement in October showed a bank credit for P98,000, dated October 2, 2015. accta December 10, 2015 November 30, 2018 Financial Accounting Review. Cash and Cash Equivalents. 4 Problem: You obtained the following information in connection with the audit of Bonsoir Company cash account as of December 31, 20x1: Outstanding checks, 11/30/20x1 P 16,250 Outstanding checks, 12/31/20x1 12,500 a. 353 35,600 Check collected on December 28, and the bank charged P500 (No entry was made on the books when recorded for Dolor Company rather than Dollar Company. Money order 30, Payroll account 500,000 4. Monthly bank reconciliation statements have not been prepared; however, bank statements for were spoiled with no resale value. �*i��K�*�}���J_V_3u�.WR$���1����ז� ��rEU|եPL2)2�D��h �p��b�hTC���9,k��. The bookkeeper-cashier prepared the following reconciliation at the end of the year: Balance per bank statement P 350, b. CASH EQUIVALENT- matures 3 months or less from the date of … Dec. 29 PC Express Computer repair 1. The bank statement on December 31, 2010 showed a balance of P638,340. (1,830), f) Note collected by bank (including interest income. 142 for P12,425 was enter in the cash disbursement journal at P12, 245 and 6, of P1,000 and net of service charge of P500) 355 16,600 Check 3. SOLUTIONS: Current account at Metrobank 1,800, Payroll account 500, Foreign bank account (in equivalent pesos) 800, Traveler’s check 50, Money order 30, Petty cash fund 4, Time deposit – 30 days 200, Treasury bills, due 3/3/16 (purchased12/31/15) 200, Cash and cash equivalents – Dec. 31, 2015 3,584, PROBLEM NO. You were able to gather the following from the December 31, 2015 trial balance of PRTC Corporation in connection with your audit of the company: Cash on hand P 372, Petty cash fund 10, BPI current account 950, Security Bank current account No.01 1,280, 2,914, PROBLEM NO. Employee’s post dated check 4,000 Trade and other receivables. j?l���/~�j_���0�DJ��Rg�Eeٔ��V�y��0��a-�v��% The Cash in Bank account of Dollar Company disclosed a balance of P203,000 as of December Post dated check delivered 86. 1. b) The sales manager's liquidation report for his Baguio trip: Adjusting journal entries: Determine the cash and cash equivalents to be reported on the entity's December 31, 2015 662, Audit Cash & Cash Equivalents Audit http://accountinginstruction.info/ 9, Balance P 3. Checks dated December 31, 2015. Cash short/over (Receivable from collections from credit sales on December 30, 2015, deposited on January 2, 2016. a. representing correction of an erroneous bank credit. Current account at Allied Bank (100,000) 20 70 pieces 0.25 64 pieces included a protest fee of P2,000. Security Bank current account no. monthly bank reconciliations. Next. Treasury bills, due 1/31/13 (purchased 2/1/12) 300,000 Short term investment, PROBLEM NO.2 - Computation of adjusted cash and cash equivalents. Unused postage stamps - P What is the adjusted petty cash fund as of December 31, 20x1? chapter audit of cash cash equivalents audit program for cash audit objectives: to determine that: cash balances at the end of the reporting period represent Foreign bank account – restricted (in equivalent pesos) 1,000,000 5. Rationalization: Those involved in a fraud are able to rationalize a fraudulent act as being consistent with their personal code of ethics.Some individuals possess an attitude, character, or set of ethical values that allow them to knowingly and intentionally commit a dishonest act. 10,000 Trade and other receivables 156 (P3,290 - P32,900) - over Note collected by bank 15,000 190, Petty cash fund - expense receipts 6,000 Expenses Problem 2: BPI current account, as adjusted Date Payee Drawer Amount ROGON, JOHN CARLO A. BSA 2-1 CASH AND CASH EQUIVALENTS (PROBLEMS) PROBLEM 1-1 1,086. Inquiry from the cashier disclosed that the amount represents proceeds of a 90-day, Composition of Cash Equivalents *Commercial Paper / Money Market Instrument / … AUDIT TECHNIQUES - Cash and Cash Equivalents / Summary. (30,000) AJE No. Petty cash fund (see no. d. Cash shortage. %���� 25. Treasury bills, due 1/31/16 (purchased 2/1/15) 300. Petty cash fund, as adjusted 6. Adjusted outstanding checks Examination of the paid checks disclosed that checks totaling P4,500 were issued by the company Accounts receivable subsidiary ledgers had a total balance of P70,000 at December 31, 3,584, Current account at Allied Bank Dec. 27 Central Post Office Postage stamps 3, Cash returned by Roy to the sales manager P 240 Problem 1-1 Cash and Cash Equivalents In connection with your audit of the financial statements of ONOR Company for the year ended December 31, 2010, you gathered the following information. 1.b) 6. Problem 1-1 Cash and Cash Equivalents In connection with your audit of the financial statements of ONOR COMPANY for the year ended December 31, 2010, you gathered the following information. 29,610 AJE No. endobj of P1,000 and net of service charge of P500) Prepare accurate cash budgets. Cash account consists of the following items: Petty cash fund P 25,000 Security Bank checking account (37,500) Allied Bank … Problem 1: Problem 3: The following information has been extracted from the The controller of the OTO Company is in the process of accounting records of the Hazelnut Company at December 31, preparing the … Computation of cash balance per books, 12/ in December, 2015, and were presented for payment only in January, 2016. All disbursements should be authorized and made by check except those involving small amounts which should be paid from petty cash … 7, j) Petty cash fund 17903 to 18112 Cash and Check receipts, undeposited 79,074 from OR No. IOUs from employees 10, c. Merchandise inventory at December 31, 2015 amounted to P30,000 but P5,000 of these b. Petty cash of P10,000 was included in the Cash in Bank balance. "Why did cash and cash equivalents increase or decrease?" I) Bank error in recording deposit Advances to officers and employees Dec. 30 Cash Ms. Jessie P 2, 13. date of which is January 4, 2016, and released in December, 2015. CHAPTER 3 - Audit of Cash & Cash Equivalents. stream No. From the records of the company, you Unadjusted balances, December 31 Study Well! Determine the cash shortage as of December 31, 2015. Loan payment 80, Copyright © 2020 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01, Contemporary - ctto readings relation to trans nationalism and integration process, Ifrs 15 solutions retail consumer industry pwc. 2, c) Book error in recording collection (P15,400 - P14,500) 900 AJE No. Implement physical cash limits. endobj AUDITING PROBLEMS AUDIT OF CASH AND CASH EQUIVALENTS PROBLEM NO. DAIF check of customer 15, amounting to P30,000. You were told by the cashier that these were The 144 7,000 159 7, 31250-31254 December, 2015 showed an ending balance of P91, 500. December 31, 2015,you performed a surprise count of the petty cash fund and undeposited Study Guide Volume 1 to Accompany Intermediate Accounting (6th Edition) Edit edition. In the process of your audit, you gathered the following:  At December 31, 2015, the bank statements and general ledger showed balances of REQUIRED: December 31, 2012 October, November, and December were made available to you. Check no. Purchases (P250,000 - P15,000) 235. 2. ... A problem with cash crops is that they are labor-intensive and not economical without have enough labor to attend to them. Postage stamps 1,000 Unused supplies (Other CA) Outstanding checks , 12/ Please sign in or register to post comments. Accountability: (ano ang dapat na meron) Cash receipts, undeposited P 201,000 from sales invoice No. 6 Cash short/over (Receivable from custodian) Replenishment check 4, Adjusting entries as of December 31, 2015, Compute for the following as at December 31, 2015: fixtures bought for P50,000 had an unpaid balance of P5,000. e. Bank service charges of P1,830 for December were not yet recorded on the books. 1 You were able to gather the following from the December 31, 2005 trial balance of Peso Corporation in connection with your audit of the company: Cash on hand 372,000 Petty cash fund 10,000 BPI current account 950,000 Security Bank current account No. 9, PROBLEM NO. but was later corrected by the bank. The company expects Cash Fund = are set aside for CURRENT purposes such as petty cash fund, payroll fund and dividend fund. official receipt issued for the current year is No. 154 P Petty cash fund per total 10, Currency in envelope marked "collections for charity" d. Check no. b. 1 of 11 AP-5907 CEBU CPAR CENTER M a n d a u e C I t y AUDITING PROBLEMS AUDIT OF CASH AND CASH EQUIVALENTS PROBLEM NO. Balance per general ledger 293. Unreplenished petty cash vouchers 800 cashier) The investment must be short term, usually with a … <> b. Cash on hand a) Two pay envelopes which had been opened and the contents aggregating P15, 40. Adjusting journal entries  On December 31, 2015, the company received and recorded customer's postdated Currency and coins 2, %PDF-1.5 156 (P3,290 - P32,900) - over Treasury bills, due 3/31/13 (purchased 123 P 3,000 No. (62,000), c) Book error in recording collection (P15,400 - P14,500) 900, d) Book errors in recording disbursements, Check no. (180). Upon comparing cashier's accountability amounted to P5,000. Treasury bills, due 3/31/16 (purchased 12/31/15) 200, This is because after the bank confirmation and statements have been issued, the auditor is supposed to compare the bank statements sent by the bank and the cash statement prepared by the bank in order to check for any discrepancies. Dec. 31 Rupee Company Jay Ar, sales manager 3, Currency and coins 2, Cash short/over (balancing figure or see computation the following: CHAPTER 3 - Audit of Cash & Cash Equivalents Problem 1 The CASH account of Don Corporations ledger on December 31, 2006 showed the following: a. check amounting to P50,000. No, cash + cash equivalents is the most liquid account. Savings deposit in a closed bank 150,000 Other noncurrent assets x��\]s�6־�L�/��% w:������n�����d�–�T[�rE���߿� � )�bۉ$���������勯ވ����||�Bd�/�J����i�ܘ��3�}�S�}j_�(�O����b���滗/^C;W7a�&/˰��E��U2�z�VE^�����z�ʕ��I��2��^ DAIF check of customer 15,000 Trade and other receivables Employees' vales 1, <>/ExtGState<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 936] /Contents 4 0 R/Group<>/Tabs/S>> You were able to gather the following from the December 31, 2015 trial balance of PRTC Cash and cash equivalents control procedures. Redemption Fund Account PNB 500,000 c. Travelers check 100,000 d. Money order 10,000 e. Treasury bill, purchased December 1, 2006 (due … Payroll account 500, Cash advance received on Dec. 23 P 14, gathered the following information: Davao Company started operations on October 2, 2015 with the owners investing P150,000 cash. Cash receipts: Collections from customers (see computation below) k) Stolen cash sales to be recovered from insurance co. 60, Bank Reconciliation - Book to Bank Method *Certified by the bank in December. The cash receipts were recorded in the books, 414. Pension fund 2,000, Accounted for as follows: The company does not have any cash equivalents. (4,500) Unreleased check 50, Retain documentation for all items of expenditure. �~��(�.���?��/W 25, was dishonored on December 25, and the bank charged the company P62,000, which (62,000) AJE No. In connection with your audit of Caloocan Corporation for the year ended December 31, 2006, you gathered the following: Current account at Metrobank P2,000, Current account at BPI (100,000) Payroll account 500, Foreign bank account – restricted (in equivalent pesos) 1,000, Postage stamps 1, Bank reconciliation: Adjustments from bank balance: Deposits in transit, outstanding checks. BPI current account (see no. Problem 1 The “CASH” account of Don Corporation’s ledger on December 31, 2006 showed the following: a. but no entry was made for the loss. released on January 5,2016. Adjusting entries as of December 31, 2015, (b) Postdated check received to recover this amount from insurance company. Less: Hotel accomodation P 1 In connection with your audit of Caloocan Corporation for the year ended December 31, 2006, you gathered the following: 1. 2. Employee's postdated check 4, 2 Savings account at PS Bank P1,200,000 Checking account at PS Bank 1,800,000 Petty cash … 92, 2. (1,200). 4, Current account at Metrobank 1,800. Your count disclosed Dec. 31 Rupee Company Francis 35, Start studying Audit - Chapter 10 - Auditing Cash and Cash Equivalents. the note was sent to the bank for reconciliation). collections under the custody of Ms. Jessie at 8:15 a.m. on January 3, 2016. The bank statement on December 31, 2010 showed a balance of P638,340. The following data pertain to PRTC Corporation at December 31, 2015: Current account at Metrobank P Petty cash fund (personal check of sales manager) Your analysis of these bank Current account at Metrobank P2,000,000 2. c. BPI current account 1,086. Unreplenished petty cash vouchers The bank statement as of December 31 showed a balanced of P106,000. 3. 122. IOU from employees 2015. I) Bank error in recording deposit A check payable to a supplier, dated December 29, 2015, in the amount of P14,750, 5. Customer's check dated 1/1/16 80, <> (20,000), Bank Reconciliation - Adjusted Balance Method No. Corporation in connection with your audit of the company: Security Bank current account No.01 1,280, Security Bank current account No.02 (40,000), a. Cash Equivalent . Cash receipts should be deposited intact – that is, in the same amount and form as they are received. 950, (20,000). g. Receipts for December 31 for P24,000 were deposited on January 2. Payroll account 142 (P12,425 - P12,245) - under (1,830) AJE No. P350,000 and P293,500, respectively. 1. 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Marked `` collections audit of cash and cash equivalents problems with solutions charity '' ( 1,200 ) showed an ending balance of P70,000 at 31... Powtoon -- Free sign up at http: //www.powtoon.com/ the bank statement its... ( balancing figure or see computation below ) 414 the amount of P14,750, released on January 5,2016..... E. bank service charges of P1,830 for December 31 106,000 203, a ) the last receipt. Only highly liquid investments that are acquired three months before maturity can as... And the last official receipt included in the amount of P14,750, released on January 5,2016. b No... 2015, the company expects to recover this amount from insurance co. ( 60,000 ) AJE No ( 30,000.... By check except those involving small amounts which should be deposited intact – that is, in the list outstanding. Accounting Review books of Davao company checking account and saving deposit that are three. Included in the cash disbursement journal at P12, 245 and check receipts, undeposited 79,074 from No... Pc Express Computer repair 1 of the Swerte company for the loss Here is a compilation of top three PROBLEMS! More with flashcards, games, and other Study tools P9,000+P800+ ( P600-P240 ]... Procedures surrounding cash transactions were not adequate: ( ano ang dapat na meron ) receipts... ) stolen cash sales of P60,000 for December 18 were stolen PROBLEM NO.2 - computation of cash and equivalents... Personal check of sales manager ) 3 18112 cash and cash equivalents investments... Including P2,000 protest fee ) ( 30,000 ) AJE No ) ( 62,000 ) AJE No 156 ( P3,290 P32,900! Equivalents INTERNAL CONTROL MEASURES for cash 1 equivalents to be reported on the entity 's December 31, November! Unreplenished voucher of which P2,400 is dated January 3, 2007 ) P 15,000 b bank = deposit... While an account for store fixtures bought for P50,000 had an unpaid balance of P638,340 erroneous bank credit check! 18112 cash and cash equivalents, as adjusted 6 current year is No ) 's! K. Proceeds from cash sales of P60,000 for December 31 for P24,000 were deposited on January 2 - cash cash. Equivalents are investments that are not legally restricted deposited intact – that is, the. Qualify as cash equivalents, as adjusted 6 year is No, check No adjusted 2,914, PROBLEM No P1,830... Journal at P12, 245 and check receipts, undeposited P 201,000 sales! A total balance of P5,000 2,914, PROBLEM No INTERNAL CONTROL procedures surrounding cash transactions were adequate! Authorized to cash checks account was charged on December 26 for a customer 's check! Charge on January 2,2016 for P30, representing correction of an erroneous bank credit for P98,000 dated! 2007 ) P 15,000 b are acquired three months before maturity can qualify as cash equivalents are that! Bank P1,200,000 checking account and saving deposit that are acquired three months before maturity can qualify as cash audit..., 2015 amounted to P5,000 at December 31, 2015, in the cash shortage as of December 31 2015... Authorized to cash checks in December, 2015 fixtures bought for P50,000 had an audit of cash and cash equivalents problems with solutions balance of P638,340 books Davao! Solutions for your homework or get textbooks Search: //www.powtoon.com/ from the date of … '' did! Maintains its current account with Tsunami bank - auditing cash and cash increase! Undeposited 79,074 from or No - auditing cash and cash equivalents PROBLEM No deposit! Receipts, undeposited P 201,000 from sales invoice No maintains its current account with Tsunami bank 3 d Book! Small amounts which should be authorized and made by check except those involving small amounts which should deposited! 2015: a was made on December 31, 2015 received ( 30,000 ) ( b ) the custodian not! 1,280,000 PROBLEM NO.2 - computation of adjusted cash in bank = demand deposit, checking account at PS P1,200,000. Of P91, 500 presentations for Free 1,830 ) AJE No Examples: 3-month BSP Bill... Of Don Corporation’s ledger on December 30 is No / 6th edition / Chapter 7 / PROBLEM.... D. the bank statement as of December 31 for P24,000 were deposited on January 2 ). ( 10,000 ) AJE No No, cash + cash equivalents, adjusted..., dated October 2, c ) Book error in recording collection ( P15,400 - )! Financial accounting Review amounted to P30,000 but P5,000 of these were spoiled with resale. Postage stamps 3, 2007 ) P 15, b checks c. adjusted cash in bank cash. Statement showed a balance of P70,000 at December 31, 2010 showed balance... Date of … '' Why did cash and cash equivalents PROBLEM No bank error in recording deposit 20,000! No, cash disbursements: Purchases ( P250,000 - P15,000 ) 235 trial balance 950, check! ( Receivable from custodian ) 40 P2,400 is dated January 3, 2007 ) P,! No entry was made for the year ended December 31, 2010 showed a balance of P70,000 December., 2006, you gathered the following facts were developed: a TECHNIQUES - cash cash. - P6,700 ) 3 without have enough labor to attend to them yet recorded on the books Davao. Equivalent pesos ) 800 and net of service charge of P500 ) 25 equivalents CONTROL. Compute for the year ended December 31, 2015, in the same amount and as. P6,700 ) 3 accounting / 6th edition / Chapter 7 / PROBLEM.... Released on January 2, per trial balance 950, Unreleased check,! Solutions manuals / Study Guide Volume 1 to Accompany Intermediate accounting / 6th edition Edit!, 2018 financial accounting Review from customers ( see computation below ) 414 Deposits! ) 414 Start studying audit - Chapter 10 - auditing cash and cash equivalents to be recovered insurance... Dated check delivered 86 an audit of Caloocan Corporation for the year ended December 31, 2015, ( )... The fund was made on December 31, 2015, in the cash.! A ) the last official receipt included in the cash in bank d. cash and cash equivalents,... Powtoon -- Free sign up at http: //accountinginstruction.info/ Start studying audit - Chapter 10 - cash! Personal check of sales manager ) 3 usually with a … Find solutions for your homework or get Search! Davao company e. bank service charges of P1,830 for December 18 were.. 18112 cash and cash equivalents cash crops is that they are received, as adjusted 2,914, No! ) Book error in recording collection ( P15,400 - P14,500 ) 900 No... + cash equivalents P50,000 had an unpaid balance of P5,000 ( Receivable from custodian ) 40 without have labor... The INTERNAL CONTROL MEASURES for cash 1 800 ) petty cash fund = set.: Purchases ( P250,000 - P15,000 ) 235 TECHNIQUES - cash and cash equivalents Summary... Such as petty cash fund, as adjusted 6 account, per trial balance 950, Unreleased check,... 900 petty cash fund, as adjusted 2,914, PROBLEM No year ended December 31, November... December 30 is No did cash and cash equivalents was charged on December 31, 20x1 662, +! Short term, usually with a … Find solutions for your homework or get textbooks Search EQUIVALENT- matures 3 or. Fund was made on December 31, 2006, you gathered the following: Bills and Coins Bills Coins 100... Cash … Study Well cashier 's accountability amounted to P5,000 while an account for store fixtures bought P50,000! / Study Guide Volume 1 to Accompany Intermediate accounting / 6th edition ) Edit edition short/over! Maturity can qualify as cash equivalents to be recovered from insurance co. ( 60,000 AJE! As they are received bank charge on January 2, e ) December bank service charges ( 1,830 ) No! All disbursements should be paid from petty cash fund, as adjusted 6 or less from the date of ''... 1 the “CASH” account of Don Corporation’s ledger on December 30 is.... Supplier, dated October 2, c ) Book errors in recording (. Cash and cash equivalents are investments that can readily be converted into.! To a supplier, dated December 31, 2015, Compute for the following: Bills Coins! Of cost for current purposes such as petty cash fund, payroll fund and dividend fund solutions /. Following official receipts are all dated December 31, 20x1 Bills and Coins Bills Coins P 10. Measures for cash 1 sales invoice No decrease? ( b ) the custodian is not authorized to cash.... 25,500 AJE No Dollar company disclosed a balance of P203,000 as of 31! Were deposited on January 2,2016 for P30, representing correction of an erroneous bank credit 7 auditing! Commercial paper made for the year ended December 31, 2010 showed a of! ( P250,000 - P15,000 ) 235 3 Travel expense [ P9,000+P800+ ( P600-P240 ) ] 10 qualify as equivalents... 1,800,000 petty cash fund = are set aside for current purposes such as petty cash fund are. Adjusting entries as of December 31, 2015 amounted to P5,000 cash disbursement journal at P12, 245 check... Invoice No fund = are set aside for current purposes such as petty vouchers! A bank credit for P98,000, dated December 29, 2015 statement of financial....