OUR LADY OF FATIMA UNIVERSITY – VALENZUELA By: Jeffrey Tillo, CPA

APPLIED AUDITING – AUDIT OF CASH

1|Page Comprehensive Theories and Problems
PROBLEM CASH – 1
a. Accounts receivable (the check has staled)
b. Accounts receivable
c. Financial assets at fair value through profit or loss
d. Cash (P3,200 only)
e. Cash (if good check, otherwise, Receivable from Employees)
f. Still included in Cash and Accounts Payable until mailed.
g. Notes receivable

PROBLEM CASH – 2
(A) Audit adjustments
Cash Equivalents 3,000,000
Cash 3,000,000

Other Non-current Financial Assets 3,200,000

Cash 3,200,000

Cash 35,000
Accrued Salaries Expense 35,000

Other Non-current Financial Assets 900,000

Cash 900,000

Miscellaneous Expenses 6,800

Advances to Employees 1,200
Cash (Petty Cash Fund) 8,000

Cash 5,300
Accrued Utilities Expense 5,300

Accounts Receivable 25,000

Cash 25,000

(B) Cash and Cash Equivalents

Savings account with Metrobank P 1,500,000
Checking account with Metrobank 800,000 + 5,300 805,300
Certificates of deposit 3,000,000
Payroll fund 1,200,000 + 35,000 1,235,000
Tax fund 500,000
Petty cash fund 12,000
Undeposited collections 85,000 – 25,000 60,000
Correct cash and cash equivalents P7,112,300

PROBLEM CASH – 3
Cash on hand (P230,000 – 43,000 – 75,000) P 112,000
Impukan bank savings account 9,500
Petty cash fund 13,500
Tipid bank current account (P160,000+13,000+5,000) 178,000
Time deposits (30 days and 90 days) (30,000+40,000) 70,000
383,000

PROBLEM CASH – 4
Savings account – Valenzuela Bank P 900,000
Checking account – Valenzuela Bank 1,200,000
Money market placement 7,500,000
Petty cash 1,500
Commercial paper 3,150,000
Currency and coins on hand 11,550
OUR LADY OF FATIMA UNIVERSITY – VALENZUELA By: Jeffrey Tillo, CPA
APPLIED AUDITING – AUDIT OF CASH
2|Page Comprehensive Theories and Problems
12,763,050
PROBLEM CASH – 5
Question No. 1
Unadjusted cash on hand P500,000
NSF check (40,000)
Post dated check received (20,000)
Adjusted cash on hand P440,000

Question No. 2
Petty cash fund per total P10,100
Employees’ vales (IOU) (1,600)
Currency in envelope marked “collections for charity” (1,200)
Unreplenished petty cash vouchers (1,300)
Petty cash fund, as adjusted P 6,000
ALTERNATIVE COMPUTATION:
Currency and coins P2,000
Replenishment check 4,000
Petty cash fund, as adjusted P6,000

Question No. 3
Unadjusted BPI current account P1,000,000
Unreleased check 80,000
Post dated check delivered 40,000
Adjusted BPI current account P1,120,000

Question No. 4
Cash on hand (see no. 1) P 440,000
Petty cash fund (see no. 2) 6,000
BPI current account (see no. 3) 1,120,000
Security Bank current account (net of overdraft of P80,000) 1,000,000
PNB time deposit 500,000
Cash and cash equivalents, as adjusted P3,066,000

PROBLEM CASH – 6
Current account – Bank of PI P 900,000
Undeposited collections 350,000
Supplier’s check for goods returned by the Company 60,000
Petty cash fund 10,000
Bank of Valenzuela (410,000-300,000) 100,000
1,430,000

PROBLEM CASH – 7
Aranzamendez Company
Reconciliation of Receipts, Disbursements and Bank balance
For the month ended July 31

Beginning Receipts Disbursements Ending

June 30 July July 31
Balance per bank statement P107,082 P249,108a P218,373 P137,817
Deposits in transit:
June 30 8,201 (8,201)
July 31 12,880 12,880
Outstanding checks:
June 30 (27,718) (27,718)
July 31 30,112 (30,112)
NSF check redeposited (8,250) (8,250)
Adjusted bank balance P 87,565 P245,537 P212,517 P120,585
OUR LADY OF FATIMA UNIVERSITY – VALENZUELA By: Jeffrey Tillo, CPA
APPLIED AUDITING – AUDIT OF CASH
3|Page Comprehensive Theories and Problems
Balance per books P15,822 P236,452 P212,529b P39,745
Bank service charge:
June (72) (72)
July 60 (60)
Collection of notes receivable:
June 71,815 (71,815)
July 80,900 80,900
Adjusted book balance P87,565 P245,537 P212,517 P120,585

a
(P137,817 + P218,373 - P107,082)
b
(P15,822 + P236,452 - P39,745)

PROBLEM CASH – 8
Question No. 1
Unadjusted book balance, 11/30/10 P77,900
Add: Unadjusted book receipts:
Collection from customers P165,000
Note collected by bank in Nov. presumed recorded in Dec. 8,000 173,000
Total 250,900
Less: Unadjusted book disbursements: 98,000
BSC for Nov. presumed recorded in Dec. 100 98,100
Unadjusted book balance, 12/31/10 P152,800

Question Nos. 2 to 5
Barroa Company
Proof of Cash
For the month ended December 31, 2010

Beginning Receipts Disbursements Ending

Nov. 30 December Dec. 31
Balance per bank statement P90,800 P169,000 P123,800 P136,000a
Deposits in transit:
November 30 5,000 (5,000)
December 31 8,000 8,000
Outstanding checks:
November 30 (32,000) (32,000)
December 31 7,700 (7,700)
Bank errors - Dec
Check of Sipag Co. (1,500) 1,500
BSC charged to another client 150 (150)
Adjusted bank balance P63,800 P172,000 P98,150 P137,650

Balance per books P77,900 P173,000 P98,100 P152,800

Customer’s note collected by
bank:
November 8,000 (8,000)
December 7,000 7,000
Bank service charge:
November (100) (100)
December 150 (150)
Book errors:
Check no. 1159
(P30,000 - P3,000) (27,000) (27,000)
Check no. 1767
(mutilated check) 5,000 5,000
Adjusted book balance P63,800 P172,000 P98,150 P137,650
OUR LADY OF FATIMA UNIVERSITY – VALENZUELA By: Jeffrey Tillo, CPA
APPLIED AUDITING – AUDIT OF CASH
4|Page Comprehensive Theories and Problems
a
(P90,800 + P169,000 - P123,800)

PROBLEM CASH – 9

PROBLEM CASH – 10

PROBLEM CASH – 11

**Features of internal control missing: Imprest system and segregation of duties

THEORIES
1. C 2. B 3. D 4. A 5. B 6. B 7. C 8. C 9. C
10. D 11. B 12. C 13. C 14. D 15. D 16. B

1 – 16 Test of details of transaction; 17 – 19 Test of balances

1 – 2 Occurrence
3 – 4 Completeness
5 – 6 Authorization
7 – 10 Accuracy
11 – 14 Cutoff
OUR LADY OF FATIMA UNIVERSITY – VALENZUELA By: Jeffrey Tillo, CPA
APPLIED AUDITING – AUDIT OF CASH
5|Page Comprehensive Theories and Problems
15 – 16 Classification
17 Existence, Completeness
18 – 19 Completeness, Valuation and Allocation