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Docshare - Tips - Modaud1 Unit 2 Audit of Cash and Cash Transactions PDF
Docshare - Tips - Modaud1 Unit 2 Audit of Cash and Cash Transactions PDF
Discussion questions 2-2 Controls over the receipt and disbursement of cash
Refer to Louwers 6-9 and 6-10.
Discussion Questions 2-3 Substantive audit procedures for the audit of cash
Refer to Louwers 6-15, 6-16, 6-17, and 6-18.
Compute for the correct amount of cash and cash equivalents and its composition as of
December 31, 2012.
The 2012 financial statements of Fort Bonifacio should include (compute for the amounts
or provide the journal entries, as applicable):
1. Cash on hand.
2. Cash in bank.
3. Adjusting entry for item G.
4. Adjusting entry for item H.
5. Cash and cash equivalents.
Case 1
1. How much is the total unreplenished vouchers counted in the petty cash fund?
2. How much is the total items counted in the petty cash fund?
3. How much is the total accountability of the cashier?
4. How much is the cash shortage/overage?
5. How much is the petty cash fund as of December 31, 2012?
Case 2
In addition to information given above, you found another PCV dated January 3, 2013
spent for photocopying amounting to P24.50. Moreover, you found out that the envelope
tagged as employees’ contribution has been opened and the money removed.
6. How much is the total unreplenished vouchers counted in the petty cash fund?
7. How much is the total items counted in the petty cash fund?
8. How much is the total accountability of the cashier?
9. How much is the cash shortage/overage?
10. How much is the petty cash fund as of December 31, 2012?
Paper bills
2 pcs, P1,000; 3 pcs, P500; 2 pcs, P100; 14 pcs, P20; 1 pc, $5.50 ?
Coins
6 loose, P10; 34 loose, P5; 17 loose, P1 ?
Envelope containing contributions for the dengue patients of
Mulanay, amount indicated P1,400) but per count is P1,375. Inside
the envelope was an official receipt named to the company
amounting to P25 for the protective lotion bought by an employee
who passed around the envelope around the offices.
Additional information:
1. The client maintains an imprest petty cash balance of P10,000.
2. Further investigation also disclosed that the official receipts from December 28 to
January 3 totaled P8,251.80. These were already recorded in the cash receipts
journal.
3. Check No. 78090 was encashed before year-end.
The cash book showed a balance of P76,634.77, which included undeposit receipts. A
credit of P950 on the bank records for a deposit made did not appear on the books of the
company.
The bank statement had a balance of P68,835.99. The outstanding checks were as
follows:
No. 0210667 P462.80
0210671 490.00
0210693 1,053.00
0210734 789.94
0210737 1,648.20
0210749 643.15
How much did the cashier misappropriate and explain how did it happen?
General Bank
Ledger Statement
Beginning balance P49,610 P61,030
Deposits 250,560
Cash receipts journal 254,560
Checks cleared (236,150)
Cash disbursements journal (218,110)
July bank service charge (870)
Note paid directly (61,000)
NSF check (3,110)
Ending balance P86,060 P10,460
November 30 December 31
a. Balances per books P619,304 P670,392
b. Balances per bank 742,800 774,696
c. Outstanding checks 254,096 320,184*
*A check of P20,000 was certified by the bank.
d. The cash receipts book showed a total of P9,341,780 while the bank statement for
the month of December showed total credits of P5,401,800.
e. Malaber records NSF checks as reduction of cash receipts. However, NSF checks
which are later redeposited are then recorded as regular receipts. The data about the
NSF checks are as follows:
1. Returned by the bank in December and recorded by the company in January
2011, P9,200.
Prepare a four-column proof of cash of the cash receipts and cash disbursements
recorded on the bank statement and on the company’s books for the month of December
2012. The reconciliation should agree with the cash figure that will appear in the
company’s financial statements. Thereafter, determine the following:
1. Cash balance as of November 30.
2. Cash balance as of December 31.
3. Book receipts for December 31.
4. Book disbursements for December 31.
5. Cash shortage at December 31, if there’s any.
The petty cash fund consisted of the following items as of December 31, 2012.
Currency and coins P2,350
Unreplenished petty cash vouchers 1,300
Currency in an envelope marked “collections for charity” with 1,200
names attached
Employees’ vales 1,600
Check drawn by Bugs Bunny Corporation, payable to the petty 4,000
cashier
Total P10,450
Included among the checks drawn by Bugs Bunny Corporation against the Gold Keeper
current account and recorded in December 2012 are the following:
a. Check written and dated December 29, 2012 and delivered to payee on January 2,
2013, P80,000.
b. Check written on December 27, 2012, dated January 2, 2013, delivered to payee on
December 29, 2012, P40,000.
The credit balance in the Diamond Bank current account No. 2 represents checks drawn
in excess of the deposit balance. These checks were still outstanding at December 31,
2012.
The savings account deposit in Bronze Bank has been set aside by the board of directors for
acquisition of new equipment. This account is expected to be disbursed in the next four months
from the balance sheet date.
Based on the above and the result of your audit, determine the adjusted balances of the following
as of December 31, 2012:
1. Cash on hand.
2. Petty cash fund.
3. Gold Keeper Bank current account.
4. Cash and cash equivalents.