Professional Documents
Culture Documents
Auditing Practice I
Workbook
2,000,000
(100,000)
500,000
1,000,000
200,000
400,000
10,000
20,000
50,000
15,000
30,000
10,000
200,000
300,000
500,000
800,000
Audit Notes:
A. Rural bank was closed two years ago. The company expects to recover only P0.60
for every peso deposited.
B. This amount includes unreplenished vouchers totalling P 7,000 as of December 31,
2016.
C. This is a two-year treasury note acquired on December 31, 2016.
D. This is a 180-day treasury bill acquired on July 31, 2016.
Required: How much should Aeson Company report as cash and cash equivalent on its
December 31, 2016 statement of financial position?
Problem 2-2 Analysis and classification of cash balances
For each of the items listed in the table below, place an X in the column indicating the
correct classification in the statement of financial position.
Cash
Cash
Equivalent
ST
Investment
Other
Checking account
Savings account
Rare coins kept for long-term speculation
Postdated checks received
Money orders received
Petty cash fund
Treasury bills purchased when two months remain in the term
Compensating balance for a short-term loan
Sinking fund to retire a bond in five years
Certificate of deposit (six-month term)
Short-term investment in marketable equity securities
1,100
230
500
The cash working fund has an imprest balance of P4,000. All unreplenished vouchers
are dated prior June 30, 2016.
Required:
Case 1
1. Based on the information above, compute the amount of cash shortage or overage.
2. Adjusting journal entries on June 30, 2016.
3. What is the balance of the cash working fund as of June 30, 2016.
Case 2
1. Assuming that the count was performed on July 5, 2016 and the repairs and
advances to employees were dated July 2 and 3, 2016, respectively, what would be
the amount of cash shortage or overage?
2. Prepare the adjusting journal entries.
3. What is the balance of the cash working fund as of June 30, 2016.
Case 3
1. Assuming that all information given in case 1 is the same except that the check
prepared by the employee payable to Genniewas dated June 30and the contribution
to the departing employee is not attached to the sheet of paper,what would be the
amount of cash shortage or overage?
2. Prepare the adjusting journal entries.
3. What is the balance of the cash working fund as of June 30, 2016.
Auditing Practice I
Workbook
P4,800
Explanation
Postage stamps
Repair of typewriter
Transportation Messenger
Office Supplies
Amount
100
150
60
90
1,000
4,900
400
500
5,750
5,900
150
Additional information:
1. The last replenishment of the fund was made on December 14, 2016 covering the
period from December 1 to 14, 2016.
2. Found inside the cash box were two pay envelopes which had been opened and the
contents aggregating P240 removed. The face of the envelope bore the notation
unclaimed.
Payee
Cash
Audit Company
Audit Company
Amount
P5,000
6,100
6,500
P80
Unused stamps:
Vouchers:
Date
December 15
December 16
December 17
December 28
January 2
January 2
Drawer
Employee A
Employee B
Customer A
Nature
Transportation
Office supplies
Photocopy fees
Postage
Newspaper
Freight charges
Amount
P65
70
80
150
10
50
IOUs:
Date
Maker
Amount
December 20
Employee C
P50
December 23
Salesman A
100
The balance of the Petty Cash account, December 31, 2016, was P 5,000.Sales invoices
(for cash sales, all in cash, no checks)
Invoice No.
Date
Amount
2007
December 30
P4,000
2008
December 31
5,100
2009
January 2
3,050
Auditing Practice I
Workbook
Auditing Practice I
Workbook
11/30/2016
P1,000
6,690
400
1,300
10
200
5,000
12/31/2016
P3,790
10,350
600
1,500
40
300
6,000
P13,800
P10,140
P 8,000
P10,000
P32,600
500
33,100
P500
400
100
1,000
P32,100
Book Balance
Plus proceeds of notes
receivable collected by the
bank in May
Plus deposit made in bank
on
May 31 not recorded on
books until June
Total
Less May bank service
charges
P28,540
P32,100
Upon inquiry about the clients June 30 bank reconciliation, you were informed that it has
been lost and that the client is too busy at this time to prepare another. Your supervisor
tells you to get the June bank statement and paid checks and to prepare the June 30
reconciliation so that you may complete the June proof of cash. The June bank
statement is reproduced below:
Bank of the Philippine Island
Account Name: GPB Company
Date
Disbursements
June 1
400
June 7
100
June 10
700
June 15
200
June 20
600
June 27
900
June 29
(E) 100
June 30
(SC) 10
June 30
(DM) 150
SC Service Charges
EC Error Corrected
Receipts
500
1,000
2,800
(EC) 100
E - Error
DM Debit Memo
The Debit memo on June 30 represents customer NSF check returned by the bank. The
check was redeposited by the client in the bank on July 1.
Cash received for the period June 21 through June 30 of P 3,500 was deposited in the
bank on July 1.
Auditing Practice I
Workbook
3,500
100
32,140
40
The paid checks accompanying this bank statement (all clearing in June) were:
No. 152
No. 153
No. 154
No. 155
No. 157
No. 158
P400
P100
P700
P200
P600
P900
The check register revealed that the last check in June was No. 159 for P250 and that
Check no. 156 was for P130.
Required:
1. Unadjusted Book Disbursements in June 30, 2016.
2. Unadjusted Book Receipts in June 30, 2016.
3. Unadjusted book balance as of June 30, 2016.
Problem 2-11Interbank transfers schedule
The information below was taken from the bank transfer schedule prepared during the
audit of INDAY Co.s financial statements for the year ended December 31, 2016.
Assume all checks are dated and issued on December 30, 2016.
Check No.
101
202
303
404
From
BDO
PNB
BPI
RCBC
To
BPI
RCBC
HSBC
BOC
Disbursement Date
Per Books Per Bank
Dec. 30
Jan. 4
Jan. 3
Jan. 2
Dec. 31
Jan. 3
Jan. 2
Jan. 2
Receipt Date
Per Books Per Bank
Dec. 30
Jan. 3
Dec. 30
Dec. 31
Jan. 2
Jan. 2
Jan. 2
Dec. 31
123
223
323
423
Auditing Practice I
Workbook
Disbursement
Recorded
Paid by
In books
Bank
12/31/16
01/04/17
01/04/17
01/05/17
12/31/16
01/05/17
01/04/17
01/11/17
Receipt
Recorded
Paid by
In books
Bank
12/31/16
12/31/16
12/31/16
12/31/16
12/31/16
01/04/17
01/04/17
01/04/17