Professional Documents
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Ap Cash
Ap Cash
Ap Cash
***The information below was taken from the bank transfer schedule prepared during the audit of BAY
Co.’s financial statement for the year ended December 31, 2013. Assume all checks are dated and issued
on December 30, 2013.
Disbursement date Receipt date
Check no. From To Per books Per bank Per books Per bank
101 National Federal Dec. 30 Jan.4 Dec.30 Jan. 3
202 Country State Jan.3 Jan.2 Dec.30 Dec.31
303 Federal American Dec. 31 Jan.3 Jan.2 Jan. 2
404 State Republic Jan. 2 Jan.2 Jan.2 Dec.31
PROBLEM 1
The cash and cash equivalents account in the ledger of Ajalon Company had a balance of P5, 935,
000 at December 31, 2014. An examination of the account, however, disclosed the following.
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 P7, 000 as of December 31, 2014.
c. This is a two-year treasury note acquired on December 31, 2014.
d. This a 180-day treasury bill acquired on July 31, 2014.
Required:
How much should Ajalon Company report as cash and cash equivalent on its December 31, 2014 balance
sheet? P2, 993, 000
PROBLEM 2
The auditor for Diadem Jade Company examined the office cash working fund immediately after the
close of the business June 30, 2014, the end of the company’s fiscal year. The following fund
composition was arrived at:
Currency P972
Unreplenished vouchers:
Supplies 338
Transportation 240
Repairs 170
Check drawn by Diadem Jade Co. payable to Jap, cash custodian 1, 100
Required:
PROBLEM 3
The following cash count sheet and additional information pertain to the accounts of Brewer Corporation
for the year ended December 31, 2014.
Cash count date: December 16, 2014
12/12/2014 transportation-messenger 60
Accountability:
Shortage 150
Additional information:
1. The last replenishment of the fund was made on December 14, 2014 cocering the period from
December 1 to 14, 2014.
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”.
PROBLEM 4
You are examining the accounts of Joash Beauty Salon. Your count of the imprest cash fund, made at
9:00 a.m. on January 2, 2014, in the presence of Joezer petty cashier, revealed:
Coins Bills
Quantity Denominations Quantity Denominations
32 P 1. 00 4 500
40 0.25 3 100
10 20
15 10
Checks:
Unpaid stamps:
Various denomination P 80
Vouchers:
December 15 transportation 65
16 office supplies 70
17 xerox fees 80
28 postage 150
January 2 newspaper 10
2 freight charges 50
IOUs
Date Maker
The balance of the petty cash account, December 31, 2013, was P 5, 000.
Sales invoices (for cash sales, all in cash, no checks)
Invoices
Required:
PROBLEM 5
Charlene Company’s cash ledger on June 30, 2014 showed a balance of P936, 000 which include total
deposits of P490, 000
I. Outstanding checks amounted to P29, 000 while deposit in transit totalled P98, 000.
II. NSF checks of P56, 000 had been returned by the bank and were not yet reflected in the
books of the company.
III. Total debits in the bank statement for June amounted to P398, 000 which included the NSF
checks in letter II above, and service fees of P10, 000. The services were recorded in the
conpany’s books in the succeeding month.
IV. Sandy Company’s check of P15, 000 was charged by the bank to Charlene company’s
account.
V. A check of P90, 000 is issued by Charlene company was recorded in its books as P120, 000.
Charlene company’s cash ledger on June 30, 2014 showed a balance of P936, 000 which include total
deposits of P490, 000.
PROBLEM 6
The Nano Company did not exercise adequate internal control over its cash transactions. During an audit,
you found the following data concerning the cash position as of June 30, 2014. On the company’s record
the balance of cash on hand and in bank was P34, 700. A credit of P500 for a note collected by the bank
does not appear on the company’s records. The bank statement balance is P27, 000. Outstanding checks
are as follows:
Number Amount
1973 720
1974 816
1975 692
P24, 972
Required:
PROBLEM 7
You are engaged to audit the books of HEIDY ENTERPRISES. From the records of the company, you
gathered the following information:
HEIDY ENTERPRISES started operation on October 2, 2014 with HEIDY investing P 150, 000 cash.
Monthly bank reconciliation statements have not been prepared; however, bank statements for October,
November, and December were made available to you. The bank statement in December 2014, showed an
ending balance of P30, 500.
Examination of the paid checks disclosed that checks totalling P4, 500 were issued by the company in
December 2014, and were presented for payment only in January 2015. Cash Count of the cashier’s
accountability amounted to P8, 500. You were told by the cashier that P5, 000 of these, in checks, were
cash sales on December 29, 2014 deposited on January 3, 2015. The balance, in currency and coins,
represents petty cash fund.
Additional data:
1. Accounts receivable subsidiary ledgers had a total balance of P70, 000 at December 31, 2014.
2. Supplier’s unpaid invoices for merchandise totalled P60, 000.
3. The bank statement in October showed a bank credit for P98, 000, dated October 2, 2014. Inquiry
from the cashier disclosed that the amount represents proceeds of a 90-day, discounted bank note.
P80, 000 of this loan was paid by check in December, 2014.
4. Merchandise inventory at December 31, 2014 amounted to P30, 000.
5. Operating expenses paid during the period totalled P180, 000; while merchandise purchases
amounted to P250, 000.
6. The gross profit rate is 40%.
PROBLEM 8
11/31/2014 12/31/2014
Cash account balance P 1, 000 P 3,790
Bank statement balance 6, 690 10, 350
Deposit in transit 400 600
Checks outstanding 1, 300 1, 500
BSC for month, not shown on the company books 10 40
Bank charges for N.F checks, not shown on the company books 200 300
Collections by bank from ERNEL company customers, not shown on 5, 000 6, 00
the company’s books
Tapes for bank statement and company cash data offer the following totals:
Deposit and credit memos per bank statement P 13, 800
Cancelled checks and debit memos per bank statement 10, 140
REQUIRED: Prepare a reconciliation of receipts, disbursements, and bank balance for December.
PROBLEM 9
You have been instructed by your supervisor on an audit of ROBERT Company to prepare a four-column
proof of cash receipts and disbursements for the month of June 2014. The bank reconciliation statement
prepared by the client in May is reproduced below:
Upon inquiry about the client’s 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:
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 P3, 500 was deposited in the bank on July 1.
The paid checks accompanying this bank statement (all clearing in June) were:
REQUIRED:
PROBLEM 10
Comparative balance sheets for 2014 and 2013 and an income statement for 2014 are provided below for
Angelita Company. Additional information from the accounting records of Angelita is provided.
Angelita Company
BALANCE SHEETS
Stockholder’s equity
Angelita Company
Income Statement
Revenues:
Expenses:
Depreciation expense-building 90
P2, 925
Additional information from the accounting records:
a. During 2014, equipment with a cost of P900, 000 (90% depreciated) was sold.
b. The Retained Earnings account shows charges of P 675, 000 and P1, 350, 000 for stock dividends
and cash dividends, respectively.
Required:
On January 1, RUTHA CO. established a petty cash account and designates Anhie Reyes as petty cash
custodian. The original amount included in the petty cash fund is P 5, 000. The following disbursements
are made from the fund.
Postage 1, 120
Entertainment 420
1. The person responsible, at all times, for the amount of the petty cash fund is the
a. Chairman of the Board of Directors
b. President of the company
c. Petty cash custodian
d. General cashier
2. The following are appropriate procedures for controlling the petty cash fund, except
a. To monitor variations in different types of expenditures, the petty cash custodian files petty
cash vouchers by category of expenditure after replenishing the fund.
b. To replenish the fund, the general cashier issues a company check to the petty cash custodian,
rather than cash.
c. To determine that the fund is being accounted for satisfactorily, surprise counts for the fund
are made from time to time by the internal auditor or other responsible official.
d. Each individual to whom petty cash is paid is required to present signed receipts to the petty
cash custodian.
4. What is the effect of not replenishing the petty cash at year-end and not making the appropriate
adjusting entry?
a. A detail audit is essential.
b. The petty cash custodian should turn over the petty cash to the general cashier.
c. Cash will be overstated and expenses understated.
d. Expenses will be overstated and cash will be understated.
Shown below is the bank reconciliation for Fitch Company for November 2013:
Total
The bank statement for December 2013 contains in the following data:
All outstanding checks on November 30, 2013, including the bank credit, were cleared in the bank in
December 2013.
There were outstanding checks of P30, 000 and deposits in transit of P38, 000 on December 31, 2013.
Required:
5. How much is the cash balance per bank on December 31, 2013?
a. 154, 000
b. 150, 000
c. 164, 000
d. 172, 00
8. How much is the cash balance per books on December 31, 2013?
a. 150, 000
b. 170,400
c. 180,400
d. 162, 000
You have been asked by the proprietor of Novey Company to verify the accountability of the cashier-
bookkeeper, who was allowed to take a vacation leave a few days ago.
a. The bank reconciliation statements prepared by the cashier-bookkeeper are presented below:
November 30, 3014:
Balance per bank statement P21, 500
Cash on hand 500
Total 22, 000
Outstanding checks:
No. 2520 P2, 000
2521 1, 400
2522 1, 900 (3,300)
Erroneous bank charge 2, 000
Erroneous bank credit (500)
Book balance P 20, 200
December 31, 2014:
Balance per bank statement P135, 000
Cash on hand 6, 300
Total 141, 000
Outstanding checks:
No. 2674 P 31, 000
2675 10, 300
2676 5, 000 (41, 300)
Erroneous bank charge 3, 000
Erroneous bank credit (600)
Book balance P102, 400
The cash in bank account in the general ledger shows the following debits and credits during December of
2014:
Cash in bank
Dec. Dec.
1 Balanced 20, 200 1 Checks issued 2, 000
2 Received customers From 4, 500 5 Checks issued 5, 200
7 Received customers From 5, 000 14 Checks issued 31, 000
12 Received customers From 20, 000 24 Checks issued 46, 000
17 Received customers From 30, 000 28 Checks issued 7, 600
23 Received customers From 9, 000
27 Received customers From 70, 000
31 Received customers from 48, 500 31 Balance 102, 400
Total 198, 200 Total 198, 200
b. The following summarized transactions were taken from the bank statement for the month of
December 2014:
Balance, December 1, 2014 P16, 500
Total Bank debits 173, 700
The total credits per bank statement:
Collection of notes receivable 5, 000
Correction of Nov. erroneous bank charge 2, 000
Dec. 10 deposit of Flesh credited in error to Novey 600
Total bank disbursements 65, 200
The total disbursements per bank statement include:
Correction of Nov. erroneous bank credit 500
Dec. check of Freeze charged in error to Novey 3, 000
c. Cash on hand per count in the early morning of Jan. 2, 2015 amounted to P6, 300.
d. Before leaving his company for one-week vacation, the proprietor had left several signed blank
checks that the cashier-bookkeeper had cashed for his personal use.
Required: