Manuel S.

Enverga University Foundation

Lucena City

AUDITING PROBLEM CPA Review

CASH, BANK RECONCILIATION M.C. Cerda, CPA, MBA, RCA
02021

PROBLEM 1

In connection with your audit of the financial statements of Abacus Corporation for
the year ended 12/31/20x1, you conducted a surprise count of the company’s petty
cash and undeposited collections at 8:30AM on January 3, 20x2. Your audit
disclosed the following:

Bills: Coins:
P100 20 pieces P5.00 72 pieces
50 160 pieces 1.00 856 pieces
20 192 pieces
Checks:
Date Payee Maker Amount
12/30/20x1 Cash PCF Custodian P 4,800
12/30/20x1 Abacus Corp. RBS Inc. 56,000
12/31/20x1 Abacus Corp. Mr. John, sales manager 6,720
12/31/20x1 Abacus Corp. Kenji Corp. 71,200
12/31/20x1 Abacus Corp. Lorena Corp. 33,200
12/31/20x1 FHM Inc.
( not endorsed ) Abacus Corp. 108,000

Unreimbursed vouchers:
Date Payee Description Amount
12/22/20x1 Mr. John, sales mgr. Advance – trip to Boracay P 80,000
12/28/20x1 Central Post Office Postage stamps 6,480
12/29/20x1 Messengers Travelling expense 600
12/29/20x1 Megabyte Inc. Computer repair 3,200

Postage stamps unused . . . . . . . P1,460

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Other items found inside the cash box:
 Unclaimed pay envelope of Alex Moro, an employee. Indicated on the pay slip
is his net salary of P30,000. Your inquiry revealed that Moro’s salary is
mingled with the petty cash fund.
 Mr. John, the sales manager, presented his liquidation report for his trip to
Baguio City:
Advance received on 12/22/20x1 P80,000
Less: Hotel accommodations, meals, etc. P64,000
Bus fare for two 4,800
Cash given to Pele, salesman 4,000 72,800
Balance P 7,200*
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Accounted for as follows:
Cash returned by Pele to the sales manager P 480
Personal check of the sales manager 6,720
Total P 7,200
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Additional information:
 The custodian is not authorized to cash checks.

 The last official receipt included in the deposit on December 30, 20x1 is no.
351 and the last official receipt issued for the current year is no.355. The
following official receipts are all dated December 31, 20x1:
OR No. Amount Form of Payment OR No. Amount Form of Payment
352 P54,400 Cash 354 P14,400 Cash
353 71,200 Check 355 33,200 Check

 The PCF per ledger is P100,000. Last replenishment date, 12/22/20x1.

Determine:
1. Amount of shortage due to the sales manager.
2. Undeposited collections on 12/31/20x1
3. Total unreimbursed vouchers on January 3, 20x2.
4. The total amount of cash shortage.
5. Amount of travelling expense based on the liquidation report of the sales
manager.

PROBLEM 2

Acme Company was organized on January 2, 20x1, The following items are from the
company’s trial balance on 12/31/20x1:

Merchandise inventory P 138,000

Accounts receivable 330,800
Land 2,000,000
Building 2,800,000
Furniture & fixtures 734,000
Accounts payable 779,300
Notes payable – bank 1,000,000
Ordinary share capital 3,000,000
Share premium 300,000
Sales 12,470,400
Operating expenses, including depreciation
of P800,000 2,010,300

Additional information:
 Deposit in transit, December 31, 20x1, P769,320.
 Service charge for December, 20x1, P4,000.
 Outstanding checks, December 31, 20x1, P950,000.
 Bank balance, December 31, 20x1, P1,784,000.
 Acme’s mark-up on sales is 30%..

Determine:
1. Total collections from sales.
2. Total payments for merchandise purchases.
3. Total cash receipts per books.
4. Total cash disbursements per books.
5. Cash balance per books on 12/31/20x1.
6. Adjusted cash balance on 12/31/20x1

.
PROBLEM 3

Akari Company’s check register shows the following entries for the month of
December:
Date Checks Deposits Balance
12/01/20x1 Beginning Balance P178,600
12/05/20x1 Deposit P130,000 308,600
12/07/20x1 Check No,344 P65,000 241,600
12/11/20x1 Check no.345 28,000 213,600
12/26/20x1 Deposit 98,000 311,600
12/29/20x1 Check No.346 17,200 294,400

The company’s bank reconciliation for November showed an outstanding check for
P24,000 ( Check no. 343, written on Nov. 28, 20x1) and a deposit in transit of
P11,100 made on November 29, 20x1.

The following data were reflected in the company’s bank statement for December,
20x1:
Date Checks Deposits Balance
12/01/20x1 Beginning Balance P 191,500
12/01/20x1 Deposit P11,100 202,600
12/04/20x1 Check no. 344 P65,000 137,600
12/05/20x1 Deposit 112,000 249,600
12/14/20x1 Check No. 345 28,000 221,600
12/15/20x1 Loan proceeds 1,000,000 1,221,600
12/20/20x1 NSF check 15,200 1,206,400
12/29/20x1 Service charge 2,000 1,204,400
12/31/20x1 Interest 7,200 1,211,600

Determine:
1. Adjusted cash balance at 11/30/20x1.
2. Outstanding checks at 12/31/20x1.
3. Deposit in transit at 12/31/20x1.
4. Total bank receipts in December, 20x1.
5. Adjusted cash balance at 12/31/20x1.

PROBLEM 4

Amor Inc. has a current account in BDO. Your audit of the company’s account
reveals the following:
 Balance taken from the company’s general ledger:
Cash balance, Nov. 30, 20x1 P1,275,720
Cash balance, December 31, 20x1 1,152,840
Receipts, December 1 – 31, 20x1 612,440
 Balances taken from the December , 20x1 bank statement:
Bank balance, Nov. 30, 20x1 1,370,360
Bank balance, Dec. 31, 20x1 1,274,440
Disbursements ( debits ) 712,160
 Outstanding checks, Nov. 30, 20x1 ( P52,280 was paid
by bank in December, 20x1 128,280
 Checks written and recorded in December, 20x1, not
included in the checks returned with the bank statement 72,160
 Deposit in transit, Nov. 30, 20x1 30,520
 Deposit in transit, Dec. 31, 20x1 32,280
  A bank credit was issued in December to correct an erroneous
charge made in November, P3,000
 Note collected by bank in December ( company not
informed of the collection ) - P4,120
 A check for P4,040 ( payable to a supplier ) was recorded in
December check register as P6,000.
 A check for P4,480 was charged by the bank as P4,840 in December.
 Amor issued a stop payment order to the bank in December. This pertains to a
check written in December which was not received by the payee. A new check
was written and recorded in the check register in December. The old check
was written off by a journal entry also in December, P1,560
 Bank service charges, Nov. 30, 20x1- P120

Determine:
1. Total book disbursements in December.
2. Total bank receipts in December.
3. Total outstanding checks, 12/31/20x1.
4. Adjusted cash balance, 11/30/20x1.
5. Adjusted book receipts, in December.
6. Adjusted bank disbursements in December.
7. Adjusted book balance, 12/31/20x1.

PROBLEM 5
In connection with your examination, Apex Company presented to you the following
information regarding its Cash in Bank account for the month of December, 20x1:
a) Balances per bank statements: November 30, P107,800, and December 31,
P115,200.
b) Balances of cash in bank account in company’s books: November 30, P82,725,
and December 31, P113,400.
c) Total receipts per books were P1,110,950 of which P6,050 was paid in cash to a
creditor on December 24.
d) Total charges in the bank statement during December were P1,094,850.
e) Undeposited receipts were: November 30, P45,300 and December 31,
P50,600.
f) Outstanding checks were: November 30, P13,375, and December 31, P9,650,
of which a check for P2,500 was certified by the bank on December 26.
g) NSF checks returned, recorded as reduction of cash receipts, were:
 Returned by bank on December, recorded also in December, P5,200.
 Returned by bank on December but recorded in January, P4,300
h) Collections by bank not recorded by Company were P60,750 in November and
P58,200 in December.
i) Bank service charges not entered in company’s books were: November 30,
P3,750 and December 31, P2,100.
j) A check for P4,750 of Never Company was charged to Denver Company in
error.
k) A check drawn for P4,200 was erroneously entered in the books as P2,400.
Determine:
1. Adjusted cash balance as of November 30, 20x1.
2. Adjusted book receipts for December, 20x1.
3. Adjusted book disbursements for December, 20x1
4. Adjusted cash balance as of December 31, 20x1.
5. Cash shortage of December 31, 20x1.