PROBLEM APC – 07, LUCILA COMPANY

During the audit of Lucila Company, the auditor focused his

attention on cash transactions because of the weaknesses in internal
control which was discovered in the preliminary evaluation, inquiries
and observation. The auditor obtained the following data concerning
cash records for the months of September and October 2020.
a) Unadjusted book balance on 09/30/20 amounted to P2,
258,000.
b) Total receipts per book in October, P1, 400,000.
c) Total disbursements per book in October, P2, 400,000.
d) Unadjusted bank balance on 09/30/20 amounted to P2,
100,000.
e) Total credits per bank in October amounted to P1, 200,000.
f) Total debits per bank in October amounted to P2, 500,000.
g) NSF checks on 09/30/20 amounted to P60, 000, while on
10/31/20, it is P40, 000.
h) Collection of accounts receivable not recorded by the
company on 09/30/20, P30, 000 and P50, 000 on 10/31/20.
i) Erroneous bank charge on 09/30/20 amounting to P10, 000
and P18, 000 on 10/31/20.
j) Erroneous bank credit on 09/30/20 amounting to P7, 000 and
P9, 000 on 10/31/20.
k) Understatement of check in payment of rent payable on
09/30/20 amounting to P90, 000 and P120, 000 on 10/31/20.
l) Deposit in transit on 09/30/20 for P130, 000.
m) Outstanding checks on 10/31/20 amounting to P30, 000