AUDIT OF CASH AND CASH EQUIVALENTS

Problem#1.

The ledger of Serene Corporation shows its cash account amounting to P

125,400 at December 31, 2019. However, the following information were
revealed from your examination of the account:

 Checks of P 7,500 in payment of liabilities were prepared before

December 31, 2019, recorded in the books, but not mailed or delivered
to payees.
 The sales book was left open up to January 10, 2020 and cash sales
totaling P 23,000 were considered as sales in December.
 The cash account includes P 35,000 appropriated for the purchase of a
drilling equipment which will soon be delivered.
 Post-dated customer collection checks totaling P 9,200 are being held by
the cashier as part of cash. The company's experience shows that post-
dated checks are eventually realized.
 Customer's check for P 2,100 deposited with but returned by bank,
"NSF", on December 23, 2019. Return was recorded in the books.

The cash balance to be shown on the balance sheet on December 31, 2019
should be:

A. 63, 600
B. 84, 100
C. 65, 700
D. 58, 200

Audit of Cash | jipb162021