QUIZ # 1 - Applied Auditing (CCE)

CASE 1 (MARANAO COMPANY)

Requirement A (Reconciliation of Maranao Company's Bank Account at December 31, 2021 Using Adjusted Balance Method
Bank balance as per Bank Statement 88,219.12
Add: Omitted Deposit 2,892.41
Deposit in Transit 5,317.20
Error in Trait Check 2,960.00
Error in Bank Deposit 1.00
Error in Bank Debit Memo 5,000.00 16,170.61
104,389.73
Less: Outstanding Checks 32,108.42
Error in Deposit 10.00
Trait Deposit Errors 1,819.20 33,937.62
Adjusted Cash Balance per Bank 70,452.11

Book Balance, Dec. 31 58,983.46

Add: Note Proceeds 2,015.00
Bank Loan Proceeds 9,875.00 11,890.00
70,873.46
Less: Customer Check 417.50
Service Charges 3.85 421.35
Adjusted Cash Balance per Book 70,452.11 2

Requirement B (Adjusting Journal Entries)

Dec. 31 Cash 9,875.00
Discount on Notes Payable 444.38
Notes Payable 10,319.38 x

Dec. 31 Cash 2,015.00

Miscellaneous Expense 5.00
Notes Receivable 2,000.00 1
Interest Revenue 20.00

Dec. 31 Miscellaneous Expense 3.85

Cash 3.85 1

Dec. 31 Accounts Receivable 417.50

Cash 417.50 1

CASE 2 (NORA COMPANY)

Requirement A (Petty Cash Fund Balance on December 31, 2020)
Petty Cash Fund per Trial Balance 30,000.00
Less: Various Expenses dated December 2020 16,250.00
Employee Cash Advance 3,500.00 19,750.00
Adjusted Petty Cash Balance 10,250.00 2

Requirement B (Petty Cash Short/Over or Is There Any)

The petty cash short/over cannot be identified/determined because the information is sufficient. x

Requirement C (Adjusted Cash Balance in Banco Islands Phils. on December 31, 2020)
BOOK BANK
Unadjusted Balances 748,320.00 638,340.00
NSF Check -22,500.00
Bank Error (7,520 - 5,720) 1,800.00
Unrecorded Cash Receipt 3,500.00
Postdated Check -67,300.00
Deposit in Transit (136,250 - 67,300) 68,950.00
Bank Debit Memo -230,000.00
Interest Earned 1,950.00
Bank Service Charges -1,260.00
Outstanding Checks -276,380.00
Adjusted Cash Balance in BIP, Dec. 31 432,710.00 432,710.00 2

Requirement D (CCE To Be Shown in the Statement of Financial Position on December 31, 2020)
Cash in Bank, Banco Islands Phils. 432,710.00
Petty Cash Fund 10,250.00
Time Deposit 1,000,000.00
Money Market Placement 4,000,000.00
Cash and Cash Equivalents, Dec. 31 5,442,960.00 x

Requirement E (Adjusting Journal Entries To Correct the Record)

Accounts Receivable 89,800.00 2
Accounts Payable 230,000.00 1
Bank Charges 1,260.00 1
Cash in Bank, Banco Island Phils. 315,610.00
Advances to Employees 3,500.00 1
Interest Income 1,950.00 1
 MULTIPLE CHOICE
justed Balance Method) 1) A
2) C
3) B
4) D
5) A
Problem 4
JE 6