Audit Cash Problems Solutions

AUDIT OF CASH | AUDITING PROBLEMS QUESTIONS
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
2.
In connection with your audit of Infotech Company for the year ended December 31, 2019, you gathered the
following information:

Current account no. 1 at Philippine National Bank 5,000,000

Current account no. 2 at Philippine National Bank (500,000)

Foreign bank account - restricted (in USD) 70,000
Petty cash fund (P10, 000 in currency and expense vouchers
for P 20, 000) 30,000

Payroll account 1,750,000

Money orders 100,000

Postage stamps 7,000

IOU from a key officer 25,000

Credit memo from a vendor for a purchase return 50,000

Employee's post-dated check 11,000

Traveler's check 130,000

Customer's not-sufficient-funds check 35,000

Treasury bills, due 2/28/20 (purchased 11/31/19) 400,000


Change fund 15,000

Bond sinking fund 1,200,000
**current exchange rate as of December 31, 2019 is at P52 for every USD1.
What is the total cash and cash equivalent to be reported by the company in its balance sheet as at December
31, 2019?
A. 5, 340, 000

B. 5, 560, 000
C. 6, 905, 000
D. 7, 390, 000
3.
In connection with your audit of Infotech Company for the year ended December 31, 2019, you gathered the
following information:

Current account no. 1 at Philippine National Bank 5,000,000

Current account no. 2 at Philippine National Bank (500,000)

Foreign bank account - restricted (in USD) 70,000
Petty cash fund (P10, 000 in currency and expense vouchers
for P 20, 000) 30,000

Payroll account 1,750,000

Money orders 100,000

Postage stamps 7,000

IOU from a key officer 25,000

Credit memo from a vendor for a purchase return 50,000
Employee's post-dated check
11,000

Traveler's check 130,000

Customer's not-sufficient-fonds check 35,000



Change fund 15,000

Bond sinking fund 1,200,000
**current exchange rate as of December 31, 2019 is at P52 for every USD1.
How much from the list above should be presented as part of Noncurrent assets?
A. 1, 200, 000

B. 3, 640, 000
C. 4, 840, 000
D. None
4.
You are conducting an audit of Prometeus Company for the year ended December 31, 2019. The internal
control procedures surrounding cash transactions were not adequate. The bookkeeper-cashier handles cash
receipts, maintains accounting records, and prepares the monthly bank reconciliations.
The bookkeeper-cashier prepared the following reconciliation at the end of the year:
Balance per bank statement P 375, 000

Deposit in transit P 162, 250
Note collected by bank 18, 000 180, 250
Total 555, 250
Less: Outstanding checks (235, 750)
P 319,
Balance per general ledger
500
In the process of your audit, you gathered the following:
a. At December 31, 2019, the bank statement and general ledger showed balances of P375,000 and
P319,500 respectively.
b. The cutoff bank statement showed a bank charge on January 2, 2020 for P50,000 representing
correction of an erroneous bank credit.
c. Included in the list of outstanding checks were the following:
- A check payable to a supplier dated December 29, 2019 in the amount of P14,500 released on
January 5, 2020.
- A check representing advance payment to a supplier in the amount of P38,000, the date of which
is January 4, 2020 and released in December 2019.
d. On December 31, 2019, the company received and recorded customer's postdated check amounting
to P35,000.
The adjusted deposit in transit as of December 31, 2019 is
A. P210,250
B. P127,250
C. P175,250
D. P145,000
5.
The following information was obtained in connection with the audit of Marlon Company's cash account as of
December 31, 2019:
Outstanding checks, 11/30/19 P 53, 250

Outstanding checks, 12/31/19 37, 500
Deposit in transit, 11/30/19 50, 000
Cash balance per general ledger 12/31/19 112, 500
Actual company collections from its customers during December 438, 500
Company checks paid by bank in December 375, 000
Bank service charges recorded on company books in December 9, 500
Bank service charges per December bank statement 10, 500
Deposits credited by bank during December 433, 500
November bank service charges recorded on company books in December 5, 750
The cash receipts book of December is underfooted by P8,500.
The bank erroneously charged the company's account for a P11,250 check of another depositor.
This bank error was corrected in January 2020.
How much is the deposit in transit on December 31, 2019?
A. P65,000
B. P57,500
C. P55,000
D. P60,000
6.
In your audit of the cash account of Monday Company, you were requested by the client to prepare a four-
column reconciliation of receipts, disbursements, and balances to reconstruct the balances per books.
Nov. 30 Dec. 31
a. Balances per bank P 15 500 P 20 930

b. Deposits in transit 2 310 3 450
c. Outstanding checks 4 260 3 870
d. Bank collections not in books 1 500 1 900
e. Bank charges not in books 950 640
f. Of the checks outstanding on December 31, one check for P 700 was certified at the request of the payee.
g. Receipts for December per bank statement: P 280 370
h. DAIF check from customer was charged by the bank on December 28 and has not been recorded: P 850
i. DAIF check returned in November and recorded in December: P 1 150
j. DAIF check returned and recorded in December, P 900
k. Check of Mandy Company charged by the bank in error, P 2 350
l. Receipt on December 6 paid out in cash for travel expenses recorded as receipts and disbursements per
books, P 750
m. Error in recording customer's check on December 20, P 165 instead of P 365
n. Error in disbursements journal for December, P 3 250 instead of P 325
You noted in your audit that the DAIF checks returned by the bank are recorded as a reduction on the cash
receipts journal instead of recording it at cash disbursements journal; redeposits are recorded as regular cash
receipts.
How much is the unadjusted book receipts for December?
A. P 285 440

B. P 280, 760
C. P 279, 445
D. P 279, 610
7.
column reconciliation of receipts, disbrusements, and balances to reconstruct the balances per books.
Nov. 30 Dec. 31
d. Bank collections not in books1 500 1 900
books, P 750
m. Error in rcording customer's check on December 20, P 165 instead of P 365
receipts.
How much is the unadjusted book disbursements for December?
A. P 273, 735

B. P 270, 810
C. P 273, 935
D. P 274 635
8.
You were engaged to audit the cash account of Cypress Company as of December 31, 2019. In your
investigation, you discovered the following information:
The bank reconciliation on November 30, 2019, is as follows:
Bank balance per bank statement, November 30 P 24,330

Add: Deposit in transit 4,875
Total P 29,205
Less: Outstanding checks
No. 4505 P 320
4508 500
4509 7,980
4511 2,876
4512 800 12,476
Balance P 16,729
Add: Bank service charge for November 50
Balance per books P 16,779
*Entered in Check Register in December
1. It is shown in the Cash Receipts journal a total receipts of P 346,669 for December. The Check Register
reflects total checks issued in December of P 350,909. A collection of P 5,912 was recorded on company books
on December 31 but was not deposited until January 5, 2020.
2. The balance per bank statement at December 31, 2019 is P 20,697. This statement shows total receipts of P
348,632 and checks and other charges paid of P 368,265.
3. Further examination revealed the following additional information:
 Check no. 4508 dated November 29, 2019 was entered in the Check Register as P 500. Your
examination of the paid returned with the December bank statement reveals that the amount of the
check is P 50.
 Check no. 4512 was mutilated and returned by the payee. A replacement check (no. 3453) was
issued. Both checks were entered in the Check Register but no entry was made to cancel check no.
4512.
 The December bank statement includes an erroneous bank charge of P 550.
 Your examination the bank credit memo accompanying the December bank statement discloses that
it represents proceeds from the note collection in December for P 3,000.
 On January 5, 2020, the bank informed your client that a December bank charge of P 75 was omitted
from the statement.
 The outstanding checks of Cypress at December 31, 2019, are as follows:
o
No. 4505 P 320
No. 4512 800
No. 4513 2,750
7,350
No. 4514 11,220
What is the total book disbursements for the month of December?
A. 350, 909
B. 350, 959
C. 350, 628
D. 350, 984
9.

Total P 29,205
No. 4505 P 320
4508 500
4509 7,980
4511 2,876
4512 800 12,476
Balance P 16,729

check is P 50.
4512.
from the statement.
o
No. 4505 P 320
No. 4512 800
No. 4513 2,750
No. 4514 7,350
What is the book balance at December 31?
A. 16, 779
B. 12, 489
C. 20, 697
D. 17, 979
10.

Total P 29,205
No. 4505 P 320
4508 500
4509 7,980
4511 2,876
4512 800 12,476
Balance P 16,729
check is P 50.
4512.
from the statement.
o
No. 4505 P 320
No. 4512 800
No. 4513 2,750
No. 4514 7,350
What is the total outstanding checks at December 31?
A. 9, 042
B. 10, 420
C. 11, 226
D. 12, 480
11.
You were able to gather the following from the December 31, 2019 trial balance of Divergent Company in
connection with your audit of the company:
Cash on hand P 385, 000

Petty cash fund 15, 000
BDO current account 750, 000
Unionbank current account no. 01 1, 150, 000
Unionbank current account no. 02 (40, 000)
PNB savings account 500, 000
PNB time deposit 250, 000
Cash on hand includes the following items:

a. Customer's check for P50,000 returned by bank on December 26, 2019 due to insufficient fund but
subsequently redeposited and cleared by the bank on January 08, 2020.
b. Customer's check for P45,000 dated January 02, 2020 received on December 29, 2019.
c. Postal money orders received from customers, P27,000.
The petty cash fund consisted of the following items as of December 31, 2019.
Currency and coins P 5, 300

Employees' vales 3, 400
Currency in an envelope marked "collections for charity" with
names attached 1, 500
Unreplenished petty cash vouchers 1, 000
Check drawn by Divergent Company payable to the petty cashier 3, 800

P 15, 000
Included among the checks drawn by Divergent Company against the BDO current account and recorded in
December 2019 are the following:
a. Check written and dated December 29, 2019 and delivered to payee on January 02, 2020, P50,000.
b. Check written on December 27, 2019 dated January 02, 2020, delivered to payee on December 29, 2019,
P76,000.
The credit balance in the Unionbank current account no. 02 represents checks drawn in excess of the deposit
balance. These checks were still outstanding at December 31, 2019.
The savings account deposit in PNB has been set aside by the board of directors for acquisition of new
equipment. This account is expected to be disbursed in the next 3 months from the balance sheet date.
Based on the above and the result of your audit, compute for the adjusted balance of Cash and cash
equivalents.
A. P2,535,100
B. P2,508,100
C. P3,035,100
D. P3,455,100
12.

Total P 29,205
No. 4505 P 320
4508 500
4509 7,980
4511 2,876
4512 800 12,476
Balance P 16,729
check is P 50.
4512.
from the statement.
o
No. 4505 P 320
No. 4512 800

No. 4513 2,750
No. 4514 7,350
What is the adjusted book receipts for the month of December?
A. 350, 959
B. 350, 984
C. 346, 669
D. 349, 669
13.

Total P 29,205
No. 4505 P 320
4508 500
4509 7,980
4511 2,876
4512 800 12,476
Balance P 16,729

check is P 50.
4512.
from the statement.
o
No. 4505 P 320
No. 4512 800
No. 4513 2,750
No. 4514 7,350
What is the adjusted book balance on December 31?
A. 16, 779
B. 20, 697
C. 17, 979
D. 16, 664
14.
The accounting staff of Radiance Corporation provided you a bank reconciliation for November 30, 2019:
Radiance Corporation
Bank Reconciliation: UB Acct No. 0021247
30-Nov-19
Bank balance P 725,000
Total P 740,000
No. 910 P 12,000
922 7,000
923 11,000 30, 000
Adjusted balance P 710,000

Book balance P 621,600
Add: Proceeds of note receivable
collected in November P 85,000
Deposit on Nov. 30 not recorded on

books until Dec. 4,000 89,000
Total P 710,600
Less: Bank service
charge 600
Adjusted balance P 710,000
The December 2019 bank statement is show below:

Unionbank of the Philippines
From November 30, 2019 to December 31, 2019
Account No.: 0021247
Date Checks Deposit
December .1 P 9,000 P 11,000
December 8 5,000
December 11 19,000 20,000
December 13 2,000 DM 2,000
December 16 4, 000
December 21 18,000 59,000
December 27 20,000
December 28 2,000 EC 2,000 EC
December 30 400 SV
December 31 4,000 DM

SV - Service Charge
EC - Error Corrected
MD - Debit Memo
CM - Credit Memo
The paid checks accompanying this bank statement (all clearing in December) are the following:
No. 922 P 7,000

No. 923 11,000
No. 924 9,000
No. 925 5,000
No. 927 15,000
No. 928 13,000

 The check register reveals that the fast check issued in December is No. 929 for P 3,000 and that
check no. 926 is for P 4,500. Cash received for the period December 22 through December 31 of P
85,000 was deposited in the bank on January 1, 2020. The bank erroneously charged the company P
2,000 on December 28 but immediately corrected the error on the same date.
 The debit memos on December 13 and December 31 represent customers NSF checks returned by
the bank. The December 12 NSF check was immediately redeposited without entry. The December 30
NSF check was redeposited on January 1, 2020 without entry.
What is the total receipts in December per books?
A. 621, 600
B. 83, 400
C. 238, 400
D. 75, 700
15.
You were engaged to audit the cash account of Resilient Company for the fiscal year ended September 30,
2019. The client has not prepared the bank reconciliation for September 30. The following information were
made available by the client:
General Ledger Bank Statement

Beginning balances P 158,880 P 175,380

Deposits 769,460

Cash receipts journal 795,350

Checks clearing the bank (706,900)
Cash disbursements
journal (678,460)

July bank service charge (3,260)

Note paid by the bank (185,000)

NSF check (8,230)
Ending balances P 275,770 P 41,450
Audit notes:
a. Bank reconciliation in June included the following information: Bank statement balance, August, P 175,380;
Deposits in transit, P 15,000; Outstanding checks, P 34,500, and; Balance per general ledger, June, P 158,880.
b. Deposits included P 15,000 from August and P 754,460 from September.

c. Checks clearing the bank in September and were recorded in the September cash disbursement journal was
at P 614,010.
d. Checks clearing the bank in September, outstanding by the end of August was at P 50,760
e. A check for P 32,400 cleared the bank, but had not been recorded in the cash disbursement journal. It was
for a payment of an accounts payable.
f. A check for P 12,480 was erroneously charged by the bank to Resilient Company.
g. The bank charged Resilient Co.'s account for a non-sufficient-fund check totaling to P 8,230. The credit
manager concluded that the customer intentionally closed its account and the owner left the city. The check
was turned over to a collection agency.
h. A note for P 174,000 plus interest, was paid directly by the bank under an agreement signed four months
ago. The note payable was recorded at P 174,000 on Resilient Co.'s books.
How much is the deposit in transit as of September 30?
A. 50, 990
B. 40, 890
C. 50, 490
D. 63, 980
16.
You were engaged to audit the cash account of Resilient Company for the fiscal year ended September 30,
2019. The client has not prepared the bank reconciliation for September 30. The following information were
made available by the client:
General Ledger Bank Statement

Beginning balances P 158,880 P 175,380

Deposits 769,460

Cash receipts journal 795,350

Checks clearing the bank (706,900)
Cash disbursements
journal (678,460)

July bank service charge (3,260)

Note paid by the bank (185,000)

NSF check (8,230)
Ending balances P 275,770 P 41,450

Audit notes:
a. Bank reconciliation in June included the following information: Bank statement balance, August, P 175,380;
Deposits in transit, P 15,000; Outstanding checks, P 34,500, and; Balance per general ledger, June, P 158,880.
b. Deposits included P 15,000 from August and P 754,460 from September.
c. Checks clearing the bank in September and were recorded in the September cash disbursement journal was
at P 614,010.
d. Checks clearing the bank in September, outstanding by the end of August was at P 50,760
e. A check for P 32,400 cleared the bank, but had not been recorded in the cash disbursement journal. It was
for a payment of an accounts payable.
f. A check for P 12,480 was erroneously charged by the bank to Resilient Company.
g. The bank charged Resilient Co.'s account for a non-sufficient-fund check totaling to P 8,230. The credit
manager concluded that the customer intentionally closed its account and the owner left the city. The check
was turned over to a collection agency.
h. A note for P 174,000 plus interest, was paid directly by the bank under an agreement signed four months
ago. The note payable was recorded at P 174,000 on Resilient Co.'s books.
How much is the cash in bank shortage as of September 30?
A. 1, 000
B. 2, 000
C. 3, 000
D. None
17.
P 385,
Cash on hand 000


Currency in an envelope marked
"collections for charity" with names
attached 1, 500
Check drawn by Divergent Company
payable to the petty cashier 3, 800
P 15, 000
a. Check written and dated December 29, 2019 and delivered to payee on January 02, 2020, P50000.
P76,000.
Based on the above and the result of your audit, compute for the adjusted balance of Cash on hand.
A. P263,000
B. P290,000
C. P335,000
D. P342,000
18.
In connection with the audit of the financial statements of Octavia Corporation for the year ended December
31, 2019, you performed a surprise count of the petty cash fund and undeposited collections under the
custody of Ms. Fatima at 08:15 am on January 2, 2020. Your count disclosed the following:
Bills and Coins

Bills Coins
P 100 20 pieces P 1.00 450 pieces
50 80 pieces P 0.50 462 pieces
20 70 pieces P 0.25 64 pieces

10 60 pieces
Unused postage stamps - P850
Checks
Date Payee Drawer Amount
Dec. 30 Cash Ms. Fatima P 2, 400
Dec. 30 Sky Company Robert 28, 000
Rayver, sales
Dec. 31 Sky Company manager 3, 360
Dec. 31 Sky Company Mark 35, 600
Dec. 31 Sky Company Betty 16, 600
Pear Corp. (not
Dec. 31 endorsed) Sky Company 54, 000

Expense Vouchers
Date Payee Description Amount
Cash advance for
Rayver, salestrip to Baguio
Dec. 23 manager City P 14, 000
Dec. 27 Central Post Office Postage stamps 3, 240
Dec. 29 Messengers Transportation 300
Dec. 29 PC Express Computer repair 1, 600

Other items found inside the cash box:

a. Two pay envelopes which had been opened and the contents aggregating P10,000 representing unclaimed
salaries had been removed.
b. The sales manager's liquidation report for his Baguio trip:
Cash advance received on Dec.

23 P 14, 000
Hotel accommodation 9, 000
Bus fare for two 800
Cash given to Vicky, salesman 600 (10, 400)

Balance P 3, 600
Accounted for as follows:
Cash returned by Vicky to the P 240

sales manager
Personal check of sales
manager 3, 360
Total P 3, 600
Additional information:
a. The custodian is not authorized to cash checks.
b. The last official receipt included in the deposit on December 30 is No. 231 and the last official receipt issued
for the current year is No. 235. The following official receipts are all dated December 31, 2019.
OR No. Amount Form of payment

232 P 27, 200 Cash
233 32, 600 Check
234 7, 200 Cash
235 15, 400 Check
c. The Petty Cash balance per general ledger is P25,000. The last replenishment of the fund was made on
December 22, 2019.
How much is the overage or (shortage), if any?
A. P34,963
B. P44,963
C. P(34,963)
D. P(44,963)
19.
Balance per bank

P 375, 000
statement
P 162,
Deposit in transit
250
Total 555, 250
Balance per general P 319,
ledger 500

a. At December 31, 2019, the bank statement and general ledger showed balances of P375,000 and P319,500
respectively.
b. The cutoff bank statement showed a bank charge on January 2, 2020 for P50,000 representing correction of
an erroneous bank credit.
 A check payable to a supplier dated December 29, 2019 in the amount of P14,500 released on
January 5, 2020.
 A check representing advance payment to a supplier in the amount of P38,000, the date of which is
January 4, 2020 and released in December 2019.
d. On December 31, 2019, the company received and recorded customer's postdated check amounting to
P35,000.
The adjusted outstanding checks as of December 31, 2019 is
A. P197,750
B. P183,250
C. P235,750
D. P221,250
20.
December 31, 2019:

November bank service charges recorded on company books in
December 5, 750
What is the total bank receipts in December?
A. P424,500
B. P383,500
C. P433,500
D. P480,000
21.
In your audit of cash of Kaching Inc.for the fiscal year ended October 31, 2019, the following information were
made available:
Shown below is the bank reconciliation for the month of September generated by Kaching’s bookkeeper.
P
Bank balance, per bank statement
193,400
Add: Deposit in transit, Sept. 30 4,400
Total 197,800
Less: Outstanding checks:
No. 447 P 1,500
451 6,500
452 4,800
455 2,400 15,200
P
Adjusted balance
182,600

P 120,
Book balance per general ledger
000
Add: Proceeds of note receivable collected by bank in
25,000
September
Deposit made in bank on Sept. 30 not recorded on books
7,000
until October
Total 182,200
Less: Bank Service charge 400
P
Adjusted balance
182,600
There was no available bank reconciliation for the month of October, instead, the accountant provided you a
copy of the October bank statement to aid you in your audit.
The September bank statement included the following bank debits and credits:
Date Particulars Debits Credits

30-Sep
1-Oct Check #451 6,500 2,800
9-Oct Check #452 4,800
10-Oct Check #455 2,400 32,000
15-Oct 750 DM 750
19-Oct Check #456 3,000

20-Oct 900
25-Oct Check #457 2,100 42,000
28-Oct Check #459 4,320
29-Oct 550 EC 550
30-Oct 1,750 SV
30-Oct 1,250 DM
31-Oct Check #460 5,460

SV - Service Charge
EC - Error Corrected
MD - Debit Memo
CM - Credit Memo
Further investigation revealed the following information:
a. All book reconciling items during September has been recorded in October.
b. The check register revealed that the last check issued in October was No. 461 for P 4,000 and that check No.
458 was P 6,800.
c. The debit memo on October 15 and October 30 were customer NSF checks returned by the bank. The check
on October 15 was immediately redeposited without entry. The check returned on October 30 was
redeposited by the client in the bank on November 1 also without entry.
d. Cash received for the period October 28 through 31 of P 25,700 was deposited in the bank on November 2.
e. Among the bank credits for the month was P 1,000 deposit of Katcheng Corp. credited by the bank to the
company's account
How much is the total book receipts for October?
A. 130, 000
B. 79, 000
C. 99, 500
D. 130, 750
22.


Total P 29,205
No. 4505 P 320
4508 500
4509 7,980
4511 2,876
4512 800 12,476
Balance P 16,729
check is P 50.
4512.
from the statement.
o
No. 4505 P 320
No. 4512 800
No. 4513 2,750
No. 4514 7,350
What is the adjusted book disbursements for the month of December?

A. 346, 669
B. 350, 959
C. 349, 669
D. 350, 984
23.
December 31, 2019:

December 5, 750
What is the book balance on November 30, 2019?
A. P51,250
B. P125,500
C. P48,500
D. P93,750
24.
December 31, 2019:


December 5, 750
What is the total amount of company checks issued in December?
A. P385,500
B. P378,750
C. P380,000
D. P359,250
25.
December 31, 2019:

December 5, 750
What is the total book disbursements in December?

A. P368,750
B. P356,250
C. P386,500
D. P386,250
26.
P 385,
Cash on hand 000


attached 1, 500
P 15, 000
P76,000.
Based on the above and the result of your audit, compute for the adjusted balances of BDO current account.
A. P826,000
B. P800,000
C. P700,000
D. P876,000
27.
Nov. 30 Dec. 31
d. Bank collections not in
books 1 500 1 900
books, P 750
m. Error in rcording customer's check on December 20, P 165 instead of P 365
receipts.
How much is the unadjusted cash balance per books as of November 30?
A. P 18, 410

B. P 12, 150
C. P 13, 000
D. P 14, 150
28.
Nov. 30 Dec. 31
d. Bank collections not in books 1 500 1 900
books, P 750
m. Error in recording customer's check on December 20, P 165 instead of P 365
receipts.
How much is the unadjusted cash balance as of December 31?
A. P 19, 175

B. P 20, 025
C. P 20, 390
D. P 20, 190
29.
P 385,
Cash on hand 000


attached 1, 500
P 15, 000
P76,000.
Based on the above and the result of your audit, compute for the adjusted balance of the Petty cash fund.
A. P6,800
B. P9,100
C. P11,600
D. P10,600
30.
The bank statement for the checking account of Matagumpay Corporation showed a December 31,
2019 balance of P1,563,870. Information that might be useful in preparing a bank reconciliation is as follows:
a. Outstanding checks were P135,750.
b. The December 31, 2019, cash receipts of P 56, 250 were not deposited in the bank until January 2, 2020.
c. One check written payment of rent for P24,600 was correctly recorded by the bank but was recorded by
Matagumpay as P26,400 disbursement.
d. In accordance with prior authorization, the bank withdrew P45,000 directly from the checking account as
payment on a mortgage note payable. The interest portion of that payment was P35,000. Matagumpay has
made no entry to record the automatic payment.
e. Bank service charges of P2,400 were listed on the bank statement.
f. A deposit of P87,500 was recorded by the bank on December 13, but it did not belong to Matagumpay. The
deposit should have been made to the checking account of Maguntapay, Inc.
g. The bank statement included a charge of P9,750 for an NSF check. The check was returned with the bank
statement and the company will seek payment from the customer.
h. Matagumpay maintains a P35,000 petty cash fund that was appropriately reimbursed at the end of
December.
i. According to instruction for Matagumpay on December 30, the bank withdrew P1,050,000 from the account
and purchased Treasury Bills for Matagumpay. Matagumpay recorded the transaction in its books on
December 31 when it received notice from the bank. Half of the treasury bills mature in two months and the
other half in six months.
What is the cash in bank balance per books on December 31, 2019?
A. P1,449,820
B. P1,452,220
C. P1,337,220
D. P1,453,220
31.
Balance per bank

P 375, 000
statement
P 162,
Deposit in transit
250

Total 555, 250
Balance per general P 319,
ledger 500

a. At December 31, 2019, the bank statement and general ledger showed balances of P375,000 and P319,500
respectively.
b. The cutoff bank statement showed a bank charge on January 2, 2020 for P50,000 representing correction of
an erroneous bank credit.
 A check payable to a supplier dated December 29, 2019 in the amount of P14,500 released on
January 5, 2020.
 A check representing advance payment to a supplier in the amount of P38,000, the date of which is
January 4, 2020 and released in December 2019.
d. On December 31, 2019, the company received and recorded customer's postdated check amounting to
P35,000.
The adjusted cash to be presented in the statement of financial position at December 31, 2019 is
A. P269,000
B. P229,500
C. P232,000
D. P250,460
32.
December 31, 2019:

November bank service charges recorded on company books in December 5, 750
The total unrecorded bank service charges as of December 31, 2019, is
A. P10,500
B. P6,750
C. P9,500
D. P16,250
33.
December 31, 2019:

December 5, 750
What is the bank balance on December 31, 2019?
A. P77,000
B. P83,000
C. P85,500
D. P96,750
34.
December 31, 2019:


December 5, 750
What is the total bank disbursements in December?
A. P390,000
B. P402,500
C. P396,750
D. P385,500
35.
December 31, 2019:

December 5, 750
What is the bank balance on November 30, 2019?

A. P65,500
B. P60,250
C. P54,500
D. P48,750
36.
December 31, 2019:

December 5, 750
What is the total book receipts in December?
A. P425,500
B. P430,000
C. P450,000
D. P465,500
37.
The bank statement for the checking account of Matagumpay Corporation showed a December 31,
2019 balance of P1,563,870. Information that might be useful in preparing a bank reconciliation is as follows:
a. Outstanding checks were P135,750.
b. The December 31, 2019, cash receipts of P56,250 were not deposited in the bank until January 2, 2020.
c. One check written payment of rent for P24,600 was correctly recorded by the bank but was recorded by
Matagumpay as P26,400 disbursement.
d. In accordance with prior authorization, the bank withdrew P45,000 directly from the checking account as
payment on a mortgage note payable. The interest portion of that payment was P35,000. Matagumpay has
made no entry to record the automatic payment.
e. Bank service charges of P2,400 were listed on the bank statement.
f. A deposit of P87,500 was recorded by the bank on December 13, but it did not belong to Matagumpay. The
deposit should have been made to the checking account of Maguntapay, Inc.
g. The bank statement included a charge of P9,750 for an NSF check. The check was returned with the bank
statement and the company will seek payment from the customer.
h. Matagumpay maintains a P35,000 petty cash fund that was appropriately reimbursed at the end of
December.
i. According to instruction for Matagumpay on December 30, the bank withdrew P1,050,000 from the account
and purchased Treasury Bills for Matagumpay. Matagumpay recorded the transaction in its books on
December 31 when it received notice from the bank. Half of the treasury bills mature in two months and the
other half in six months.
What amount of cash and cash equivalents should be reported in the current asset section of the balance
sheet on December 31, 2019?
A. P1,921,870
B. P2,481,870
C. P1,956,870
D. P2,446,870

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AUDIT OF CASH | AUDITING PROBLEMS QUESTIONS

**current exchange rate as of December 31, 2019 is at P52 for every USD1.

A. 5, 340, 000

**current exchange rate as of December 31, 2019 is at P52 for every USD1.

A. 1, 200, 000

Balance per bank statement P 375, 000

In the process of your audit, you gathered the following:

Outstanding checks, 11/30/19 P 53, 250

The cash receipts book of December is underfooted by P8,500.

This bank error was corrected in January 2020.

How much is the deposit in transit on December 31, 2019?

a. Balances per bank P 15 500 P 20 930

How much is the unadjusted book receipts for December?

A. P 285 440

How much is the unadjusted book disbursements for December?

A. P 273, 735

The bank reconciliation on November 30, 2019, is as follows:

Bank balance per bank statement, November 30 P 24,330

3. Further examination revealed the following additional information:

What is the total book disbursements for the month of December?

The bank reconciliation on November 30, 2019, is as follows:

Bank balance per bank statement, November 30 P 24,330

3. Further examination revealed the following additional information:

What is the book balance at December 31?

The bank reconciliation on November 30, 2019, is as follows:

Bank balance per bank statement, November 30 P 24,330

3. Further examination revealed the following additional information:

What is the total outstanding checks at December 31?

Cash on hand P 385, 000

Cash on hand includes the following items:

Currency and coins P 5, 300

Check drawn by Divergent Company payable to the petty cashier 3, 800

The bank reconciliation on November 30, 2019, is as follows:

Bank balance per bank statement, November 30 P 24,330

3. Further examination revealed the following additional information:

No. 4512 800

What is the adjusted book receipts for the month of December?

The bank reconciliation on November 30, 2019, is as follows:

Bank balance per bank statement, November 30 P 24,330

3. Further examination revealed the following additional information:

What is the adjusted book balance on December 31?

Deposit on Nov. 30 not recorded on

The December 2019 bank statement is show below:

No. 922 P 7,000

What is the total receipts in December per books?

General Ledger Bank Statement

b. Deposits included P 15,000 from August and P 754,460 from September.

How much is the deposit in transit as of September 30?

General Ledger Bank Statement

b. Deposits included P 15,000 from August and P 754,460 from September.

How much is the cash in bank shortage as of September 30?

Cash on hand includes the following items:

Currency and coins P 5, 300

Bills and Coins

20 70 pieces P 0.25 64 pieces

Unused postage stamps - P850

Other items found inside the cash box:

Cash advance received on Dec.

Cash given to Vicky, salesman 600 (10, 400)

Accounted for as follows:

Cash returned by Vicky to the P 240

OR No. Amount Form of payment

How much is the overage or (shortage), if any?