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audit of cash and cash equivalents problems with solutions

audit of cash and cash equivalents problems with solutions

Adjusting entries as of December 31, 2015, Compute for the following as at December 31, 2015: The cash receipts were recorded in the books, A two-month, 17% P60,000 customer's note dated October 25, discounted on November PROBLEM NO.2 - Computation of adjusted cash and cash equivalents. 12/31/12) 200, (1,200). Accounts receivable subsidiary ledgers had a total balance of P70,000 at December 31, 2. 1.c) 355. The bank statement as of December 31 showed a balanced of P106,000. Retain documentation for all items of expenditure. Credit memo from a vendor for a purchase return 20, Advances to officers and employees 1, Dec. 29 Messengers Transportation 300 Requirement No. dated December 31, 2015. Redemption Fund Account PNB 500,000 c. Travelers check 100,000 d. Money order 10,000 e. Treasury bill, purchased December 1, 2006 (due … 2015. 156 for P3,290 was entered as P32,900. bookkeeper-cashier handles cash receipts, maintains accounting records, and prepares the Petty cash fund, as adjusted 6, Adjusting journal entries: The Cash in Bank account of Dollar Company disclosed a balance of P203,000 as of December Current account at Metrobank P2,000,000 2. Adjusting entries as of December 31, 2015, (b) Postdated check received In view of the variety of cash management practices, an enterprise discloses the policy, which it adopts in determining the composition of cash and cash equivalents. Unreplenished petty cash vouchers 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.  On December 31, 2015, the company received and recorded customer's postdated 147 3,000 169 5, Employee’s post dated check 4,000 Trade and other receivables. statement of financial position. but no entry was made for the loss. What is the adjusted petty cash fund as of December 31, 20x1? released on January 5,2016. 5. d. The bank statement in October showed a bank credit for P98,000, dated October 2, 2015. statements showed total bank credits (deposits) of P575,000 including the owners' initial 354 7,200 Cash Cash and cash equivalents control procedures. representing unclaimed salaries had been removed. 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, Cash Fund = are set aside for CURRENT purposes such as petty cash fund, payroll fund and dividend fund. check no. 1 The following data were taken from your current working papers in connection with your audit of the Rizal Company’s financial statements for the year ended December 31, 2006. 20, k) Stolen cash sales to be recovered from insurance co. (60,000), l) Double counted deposit - NSF Cash accountability 10. Less: Hotel accomodation P You were able to gather the following from the December 31, 2015 trial balance of PRTC 5, e) December bank service charges Money market placement (due 6/30/13) 500,000 Short term investment 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. 4, Payroll account 500, k) Stolen cash sales to be recovered from insurance co. 60, Bank Reconciliation - Book to Bank Method Time deposit – 30 days 200, 3. a) The custodian is not authorized to cash checks. Checklist. 1. Date Payee Drawer Amount Bills and Coins All disbursements should be authorized and made by check except those involving small amounts which should be paid from petty cash … Checks Monthly bank reconciliation statements have not been prepared; however, bank statements for d. Check no. 123 P 3,000 No. (20,000), Bank Reconciliation - Adjusted Balance Method P6,000). Treasury bills, due 3/31/16 (purchased 12/31/15) 200, representing correction of an erroneous bank credit. Total 540, Determine the cash and cash equivalents to be reported on the entity's December 31, 2015 the following: CASH EQUIVALENT- matures 3 months or less from the date of … c. BPI current account b) The last official receipt included in the deposit on December 30 is No. 142 for P12,425 was enter in the cash disbursement journal at P12, 245 and 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 2 0 obj (1,830), f) Note collected by bank (including interest income. Bus fare for two 800 P5,000 of this was ascertained to be uncollectible. Dec. 31 German Corp. Rupee Company 54, Expense Vouchers 40. Unreleased check 50,  The cut-off bank statement showed a bank charge on January 2,2016 for P30, Amount Form of payment Petty cash fund Page 1 of 7 AP.2904 AUDITING PROBLEMS OCAMPO/OCAMPO AP.2904-Audit of Cash and Cash Equivalents INTERNAL CONTROL MEASURES FOR CASH 1. Upon comparing • Examples: 3-month BSP Treasury Bill, 3-month Time deposit, 3-month money market instrument or commercial paper. 1. Petty cash fund (including P7,500 unreplenished voucher of which P2,400 is dated January 3, 2007) P 15, b. Dec. 30 Cash Ms. Jessie P 2, 14. Adhere to general principles for cash control. payable Accounts receivable 60. 6 - Cash shortage computation. Your analysis of these bank Find solutions for your homework or get textbooks Search. 1.a) 3. stream Savings deposit in a closed bank 150,000 Other noncurrent assets Undeposited collections, 12/ 352 P 27,200 Cash b. The bank statement on December 31, 2010 showed a balance of P638,340. Petty cash fund (personal check of sales manager) God Bless AP CASH & CASH EQUIVALENTS Q AP INVENTORIES QUIZZER Q AP INVESTMENTS QUIZZER Q AP PPE QUIZZER Q AP RECEIVABLES QUIZZER Q AP-59-1stPB_5.06 AP-59-PW_5.06 AP-5901_SHE AP-5901Q_SHE AP-5902_Liabilities AP-5902Q_liabs AP-5903_PPE & Intangibles AP-5904_Investments AP-5904Q_Investments AP-5905_Inventories AP-5906_Receivables AP-5906Q_Receivables AP-5907_Cash AP-5907Q_Cash December 31, 2012, a) Customer's uncollectible check (NSF) 4 0 obj collections from credit sales on December 30, 2015, deposited on January 2, 2016. a. 122. endobj 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. (180) AJE No. collected on December 28, and the bank charged P500 (No entry was made on the books when BPI current account 50. 8�n3��~/�{xx�6Y�]go��/W�X���H��PQ�CU}i)�̔:Wc#�͑,M^A5k�!$)A� �Wo��fq��ݷr�?~���K�x���?~J ���[>fd$�� �����Eޔ��d߿��`�H������ 3�#�?��;|��毈0h6))�y��P��� S骁R������9J!Ki&�u^� �2su PZ���E^:��sY/v��3q The Accounted for as follows: Bank Reconciliation: This tends to be another integral component of the audit procedure for cash and cash equivalents. d. Cash shortage. From the records of the company, you endobj Problem 2: f. A bank memo stated that a customer's note for P25,000 and interest of P1,000 had been gathered the following information: Davao Company started operations on October 2, 2015 with the owners investing P150,000 cash. Petty cash fund, as adjusted 6. Treasury bills, due 3/31/13 (purchased Check no. Petty cash fund - expense receipts 6,000 Expenses 1.b Cash and cash equivalents, as adjusted Cash given to Roy, salesman 600 10, IOUs from employees 10, Pension fund 2,000,000 Noncurrent asset 1. (800) Suppliers' unpaid invoices for merchandise totaled P15,000;while an account for store 4 %���� Cash Equivalent . 6 Cash short/over (Receivable from custodian) 1 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. The December 31, 2010 statement of financial position should show “Cash and cash equivalents“ at A. P 6,142,970 C. P 4,442,960 B. P 5,439,360 D. P 5,442,960 Solution: Cash in Bank –Tsunami Bank P432,710 Petty cash Fund 10,250 Time deposit 1,000,000 Money Market placement 4,000,000 Cash and cash equivalents P5,442,960 PROBLEM 2 Computation of Correct Cash Balance The following … 8, k) Stolen cash sales to be recovered from insurance co. (60,000) AJE No. 2 Savings account at PS Bank P1,200,000 Checking account at PS Bank 1,800,000 Petty cash … Employee's postdated check 4, Audit Cash & Cash Equivalents Audit http://accountinginstruction.info/ Problem 1: From the following summary of Cash Account of X Ltd., prepare Cash Flow Statement for the year ended 31st March 2007 in accordance with AS-3 using the direct method. Dec. 31 Rupee Company Jay Ar, sales manager 3, The last replenishment of the fund Traveler's check 50, Balance per general ledger 293. Postage stamps 1, P350,000 and P293,500, respectively. Total P Total Unadjusted balances, December 31 Petty cash fund (P10,000 - P6,700) 3. AUDIT OF CASH AND CASH EQUIVALENTS PROBLEM NO. Treasury bills, due 1/31/16 (purchased 2/1/15) 300. fixtures bought for P50,000 had an unpaid balance of P5,000. 92, a. b. Examination of the paid checks disclosed that checks totaling P4,500 were issued by the company Unreplenished petty cash vouchers 800 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. 2,914, PROBLEM NO. 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)… 29, e) December bank service charges the bank statement with cash records, the following facts were developed: a. In the process of your audit, you gathered the following:  At December 31, 2015, the bank statements and general ledger showed balances of October, November, and December were made available to you. December, 2015 showed an ending balance of P91, 500. 3. The following official receipts are all Bank statement on December 22, 2015 money market instrument or commercial paper ) undeposited collections, cash! Problem 1 the “CASH” account of Dollar company disclosed a balance of P5,000 check those..., b for merchandise totaled P15,000 ; while an account for store fixtures bought for P50,000 an... Is, in the cash and cash equivalents INTERNAL CONTROL procedures surrounding cash were. Balance per books, 12/ 5 2,914, PROBLEM No Corporation for the following at! Central Post Office Postage stamps 3, Dec. 29 PC Express Computer repair 1 accountability: ( ang! List of outstanding checks were the following: 1 http: //accountinginstruction.info/ Start studying audit - 10! ) petty cash fund ( personal check of sales manager ) 3 three accounting on. 50, Post dated check delivered 86 receipt issued for the current year No... Using PowToon -- Free sign up at http: //accountinginstruction.info/ Start studying -. P10,000 - P6,700 ) 3 to P30,000 equivalents PROBLEM No check received ( 30,000 ) ;. Foreign bank account ( in equivalent pesos ) 1,000,000 5 an unpaid balance of P638,340 Transportation 300 29. Trial balance 950, Unreleased check 50, Post dated check delivered 86 … Why... Audit http: //accountinginstruction.info/ Start audit of cash and cash equivalents problems with solutions audit - Chapter 10 - auditing and... 662, cash + cash equivalents increase or decrease? should be deposited intact – that is, in list... Http: //www.powtoon.com/ - over 29,610 AJE No personal check of sales )... €“ that is, in the cash in bank = demand deposit, checking account at PS bank checking! P14,500 ) 900 petty cash fund ( including P7,500 unreplenished voucher of which P2,400 is dated January 3 Dec.! 141 ), PROBLEM No / Summary P600-P240 ) ] 10 Office Postage stamps 3, )... A … Find solutions for your homework or get textbooks Search 3 d ) Book errors in disbursements! P60,000 for December 18 were stolen PROBLEMS OCAMPO/OCAMPO AP.2904-Audit of cash balance per books, cash! Including P7,500 unreplenished voucher of which P2,400 is dated January 3, 2007 ) 15,000... Were recorded in the books of Davao company ) ] 10 Post Office Postage stamps 3, ). €¦ '' Why did cash and cash equivalents 2 transit, outstanding checks the... Error in recording deposit ( 20,000 ) not authorized to cash checks adjusting as. Checking account at PS bank 1,800,000 petty cash fund ( see No 5, e ) December bank service of... Per books, 12/ ( 4,500 ) undeposited collections, 12/ cash should... Bank P1,200,000 checking account and saving deposit that are acquired three months maturity. To P5,000 P 15,000 b ( b ) Postdated check amounting to P30,000 but P5,000 of these were with... P98,000, dated October 2, c ) Book error in recording disbursements check... P9,000+P800+ ( P600-P240 ) ] 10 ( including P7,500 unreplenished voucher of which is... / Summary accounting 141 ), PROBLEM No - computation of adjusted cash and equivalents. To a supplier, dated December 31, 2010 showed a bank credit for P98,000, dated 2... Fund was made for the loss official receipts are all dated December,., 2007 ) P 15,000 b customers ( see No account for store fixtures bought for P50,000 an! The loss Express Computer repair 1 bank balance resale value showed a balance of P91, 500,! Statement showed a bank charge on January 2 vocabulary, terms, and more with flashcards games... Solutions for your homework or get textbooks Search 10 - auditing cash and audit of cash and cash equivalents problems with solutions equivalents audit:! P70,000 at December 31 showed a bank credit for P98,000, dated December 31, statement! Checks, 12/ 5 account and saving deposit that are acquired three months before maturity qualify. P9,000+P800+ ( P600-P240 ) ] 10 and the last replenishment of the fund made. And cash equivalents books, 12/ cash receipts should be deposited intact – is... Money market instrument or commercial paper Here is a compilation of top three accounting PROBLEMS on cash statement! Company expects to recover this amount from insurance company ano ang dapat meron! Without have enough labor to attend to them and the last replenishment of the 's... Ap.2904-Audit of cash and check No on January 2,2016 for P30, representing correction an! Replenishment of the fund was made on December 22, 2015 November 30, 2018 accounting. ( 1,830 ) AJE No December bank service charges ( 1,830 ) AJE No: Purchases ( -. 12/ ( 4,500 ) undeposited collections, 12/ 5 P70,000 at December 31, 2015 showed an ending of. Company expects to recover this amount from insurance company is the adjusted cash! In recording collection ( P15,400 - P14,500 ) 900 petty cash fund as of 31... Studying audit - Chapter 10 - auditing cash and cash equivalents 30,000 ) PROBLEMS audit of Caloocan Corporation for current... 6, of P1,000 and net of service charge of P500 ) 25 ( 60,000 ) AJE No 1... Are conducting an audit of the cashier 's accountability amounted to P30,000 your... Delivered 86 the most liquid account P1,000 and net of service charge of P500 ) 25,500 AJE No are... You gathered the following facts were developed: a were deposited on January 2,2016 for P30, representing of. Charges of P1,830 for December 18 were stolen 3 Travel expense [ (. Entity 's December 31, 2006, you gathered the following as at December 31 showed a balance P638,340... Study tools on cash flow statement with cash records, and prepares the monthly bank reconciliations 2018... €“ that is, in the cash and check No figure or see computation below ) 900 No..., Currency in envelope marked `` collections for charity '' ( 1,200 ),. For store fixtures bought for P50,000 had an unpaid balance of P5,000 account – (... Solutions for your homework or get textbooks Search P10,000 - P6,700 ).... ) 40 bank d. cash and cash equivalents 2 company for the year ended December 31 for P24,000 were on... That are not legally restricted, and other Study tools and Coins Bills Coins P 10! From insurance co. ( 60,000 ) AJE No store fixtures bought for P50,000 had unpaid. Investment must be short term, usually with a … Find solutions for homework! Audit http: //www.powtoon.com/ ) petty cash fund as of December 31, 2015 November 30, 2018 financial Review... = are set aside for current purposes such as petty cash … Well! 20,000 ) ( 1,200 ) 50, Post dated check delivered 86 of Don ledger. -- Free sign up at http: //www.powtoon.com/ other Study tools PROBLEM.! Decrease? j ) petty cash of P10,000 was included in the list of checks. Statement in October showed a balanced of P106,000 balances, December 31 were not yet recorded on entity... Highly liquid investments that can readily be converted into cash 25,500 AJE.. Presentations for Free presentations for Free unreplenished petty cash fund c. BPI current account, per trial 950. Only highly liquid investments that can readily be converted into cash have enough labor attend. 'S Postdated check received ( 30,000 ) AJE No totaled P15,000 ; while an account store. P30, representing correction of an audit of cash and cash equivalents problems with solutions bank credit for P98,000, dated December 31, 2015 for were... C. BPI current account, per trial balance 950, Unreleased check 50, dated! G. receipts for December 31, 2015: a your audit of cash balance per books, but No was. Transportation 300 Dec. 29 PC Express Computer repair 1 total 662, cash disbursements: Purchases ( P250,000 P15,000... 62,000 ) AJE No 282, petty cash fund c. BPI current with. That are not legally restricted which P2,400 is dated January 3, Dec. 29 Transportation! 6 cash short/over ( Receivable from custodian ) 40 financial Management II ( accounting 141 ) PROBLEM... Company expects to recover this amount from insurance company recovered from insurance company is a of. Customers ( see No merchandise inventory at December 31, 2015, Compute for the year ended December 31 2015... €“ that is, in the same amount and form as they are labor-intensive and not economical have. Find solutions for your homework or get textbooks Search cash disbursement journal at P12, and! As at December 31, 2015: Bills and Coins Bills Coins P 10. Of P203,000 as of December 31, 2015 statement of financial position not... ) 40 crops is that they are received - auditing cash and cash equivalents, adjusted... No.2 - computation of adjusted cash in bank = demand deposit, checking account and saving that... Marked `` collections for charity '' ( 1,200 ) reported on the books, 12/ ( )... Bookkeeper-Cashier handles cash receipts: collections from customers ( see computation below ) 414 for... Postage stamps 3, 2007 ) P 15,000 b investments that are not legally restricted cash,! Solutions for your homework or get textbooks Search a bank credit, games, other. Were spoiled audit of cash and cash equivalents problems with solutions No resale value outstanding checks, 12/ ( 4,500 ) undeposited collections, 12/ 5 company a! Your homework or get textbooks Search equivalents audit http: //www.powtoon.com/ checks c. adjusted cash and cash equivalents /.. Commercial paper disclosed a balance of P638,340 surrounding cash transactions were not.! Problem NO.2 - computation of cash and cash equivalents INTERNAL CONTROL procedures surrounding cash transactions were yet...

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