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QUIZ Cash AP 1
QUIZ Cash AP 1
Problem
1. You were able to gather the following from the December 31, 2020 trial balance of Angel Corporation in
connection with your audit of the company:
a. Customer’s check for 40,000 returned by bank on December 26, 2020 due to insufficient fund but
subsequently redeposited and cleared by the bank on January 8, 2021.
b. Customer’s check for 20,000 dated January 2, 2021, received on December 29, 2020.
c. Postal money orders received from customers, 30,000.
The petty cash fund consisted of the following items as of December 31, 2020.
Included among the checks drawn by Angel Corporation against the BPI current account and recorded
in December 2020 are the following:
a. Check written and dated December 29, 2020 and delivered to payee on January 2, 2021,
80,000.
b. Check written on December 27, 2020, dated January 2, 2021, delivered to payee on December
29, 2020, 40,000.
The credit balance in the Security Bank current account No. 2 represents checks drawn in excess of the
deposit balance. These checks were still outstanding at December 31, 2020.
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.
Questions:
Based on the above and the result of your audit, determine the adjusted balances of following:
1. Cash on hand
a. P410,000 c. P470,000
b. P530,000 d. P440,000
b. P1,120,000 d. P1,040,000
4. Cash and cash equivalents
a. P2,917,200 c. P3,052,000
b. P3,074,900 d. P3,066,000
2. A count of the petty cash fund on January 3, 2021 revealed the following composition:
2. What is the correct amount of petty cash fund to be shown on the statement of financial
position as of December 31, 2020?
a. 9,500 b. 10,300 c. 2,800 d. 5,300
3. The accountant of Joshtin Company prepared the following bank reconciliation at December 31, 2020:
Balance per bank
statement P350,000
Add: deposit in transit 150,000
note collected
by bank 15,000
Total P540,250
Less: outstanding checks 246,750
Balance per ledger P293,500
a. At December 31, 2020, the bank statement and the general ledger showed balances of
350,000 and 293,500, respectively.
b. The cut-off bank statement showed a bank charge on January 2, 2021 for 25,000
representing a correction of an erroneous bank credit.
d. On December 31, 2020, the company received and recorded a customer’s check dated
January 2021 amounting to 50,000.
Questions:
4. The Silver Company’s internal control over its cash transactions is very weak. Actually, the company’s
cash position at December 31, 2021 were as follows:
The cash book showed a balance of 15,000, which included cash on hand. A credit of P150 on the
bank’s records did not appear on the company’s books. The bank statement showed a balance of
12,300; and the outstanding books were: 0100-P120; 0201-P100; 0300-P230; 1501-P110; 1510-P140;
and 1515-P150.
The cashier removed all of the cash on hand in excess of 3,000 and then prepared the ff reconciliation.
Balance per books, Dec. 31, 2021 15,000
Add: Outstanding checks:
No. 1501 P110
1502 140
1515 150 300
P15, 300
Deduct - Cash on Hand 3, 000
Balance per bank, Dec 31, 2021 P12, 300
Deduct – Unrecorded credit 150
True Cash, Dec 31, 2021 P12, 150
2. A correct reconciliation will show that the cashier’s accountability for cash on hand is
a. P3, 300
b. P3, 400
c. P3, 500
d. P3, 700
e. None of the above.
3. The adjusted cash to bank balance for the balance sheet on December 31, 2021 is
a. P11, 300
b. P11, 450
c. P11, 600
d. P11, 850
e. None of the above.
5.
The following information pertains to the cash of Oz Company:
Nov 31 Dec. 31
Balance shown on bank statement P 27,380 P 26,960
4
For Dec.
Deposits shown in bank statement P 55,880
Charges shown on bank statement 56,300
Cash receipts shown in company’s books 53,980
Cash payments shown in company’s books 54,760
The bank service charge was P180 in November (recorded by the company during December) and
P240 in December (not yet recorded by the company).
Included with the December bank statement was a check for 5,000 that had been received on
December 25 from a customer on account. The returned check marked “NSF” by the bank, has not yet
been recorded on the company’s books.
During December the bank collected 7,500 of bond interest for the company and credited the proceeds
to the company’s account. The company earned the interest during the current accounting period but
has not yet recorded it.
During December the company issued a check for 6,960 for equipment. The check, which cleared the
bank during December, was incorrectly recorded by the company for 8,960.
a. Should be added in the December 31 column since this was returned back by the bank.
b. Should be deducted in the December 31 column since this was returned back by the bank.
c. Should be deducted in the December 31 column since this was returned back and not paid by
the bank, thus not considered as receipts.
d. Should be added in the December 31 column since this was returned back and not paid by the
bank, thus not considered as receipts.
6. The check issued but was incorrectly recorded as 8,960 should be adjusted by:
a. Accounts payable 2,000 c. Cash 2,000
Cash 2,000 Accounts payable 2,000
b. Equipment 2,000 d. Cash 2,000
Cash 2,000 Equipment 2,000
6. You examined the petty cash fund of the B & W Company immediately after the close of business,
December 31, 2020, the end of its fiscal year. The following fund composition was arrived at:
Currency P3,020.00
Checks:
12-29-2020 Judith Cruz, Employee 1,200.00
12-29-2020 U Company, Customer 2,500.00
12-30-2020 Alvin Taipan, Employee 1,100.00
01-15-2021 Judith Cruz, Employee 1,380.00
(Cashed, December 30, 2020)
12-31-2020 I Company, Customer 3,500.00
7. You obtained the following information on the current account of Magtanggol Company during your
examination of its financial statements for the year ended December 31, 2021.
The bank statement on November 30, 2021 showed a balance of 76,500. Among the bank credits in
November was customer’s note for 25,000 collected for the account of the company which the company
recognized in December among its receipts. Included in the bank debits were cost of checkbooks
amounting to P300 and a 10,000 check which was charged by the bank in error against Magtanggol Co.
account. Also in November you ascertained that there were deposits in transit amounting to 20,000 and
outstanding checks totaling P42,500.
6
The bank statement for the month of December showed total credits of 104,000 and total charges of
51,000. The company’s books for December showed total receipts of 183,900, disbursements of
101,800 and a balance of P121,400. Bank debit memos for December were: No. 143 for service
charges, P400 and No. 145 on a customer’s returned check marked “DAIF” for 6,000.
On December 31, 2021 the company placed with the bank a customer’s promissory note with a face
value of 30,000 for collection. The company treated this note as part of its receipts although the bank
was able to collect on the note only in January, 2022.
A check for P990 was recorded in the company cash payments books in cash payments book as 9,900.
PROBLEM
1. Answers: 1) D; 2) A; 3) B; 4) D
Suggested Solution:
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)
Question No. 3
Unadjusted BPI current account P1,000,000
Unreleased check 80,000
Post dated check delivered 40,000
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
2.
1. B 2. D
1. Total per count (exclude the unsigned pay envelope with no contents) P 19,600
Cashier’s accountability
Petty cash fund P15,000
Unreleased payroll 5,000 20,000
Cash shortage P 400
8
3. Answers:
1. A 2. D 3. B 4. A
Solutions:
4. Answer:
1. d.
2. d.
3. b.
Solution:
Unadjusted book balance 15,000
Add: Unrecorded bank credit 150
Total Accountability P15, 150
Unadjusted book balance P12, 300
Less: Outstanding checks:
No. 0100 P120
0201 100
0300 230
1501 110
1510 140
1515 150 850
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5. A,C,C,B,D,D
SOLUTION
Adjusting Entry:
Service charge 240
Cash 240
Accounts receivable 5,000
Cash 5,000
Cash 7,500
Interest income 7,500
Cash 2,000
Equipment 2,000
6. Supporting Computations:
1. ?2,720.00 (B) 2. ?84.00 (D)
Currency ?3,020.00
Checks:
?
12-29-17 Judith Cruz, Employee
1,200.00
12-29-17 U Company, Customer 2,500.00
12-30-17 Alvin Taipan, Employee 1,100.00
01-15-18 Judith Cruz, Employee 1,380.00
10
Accountability:
?
Imprest fund 5,000.00
Unused Supplies 150.00
Unremitted Collections:
12-29-17 U Company, Customer ?2,500.00
12-31-17 I Company, Customer 3,500.00 6,000.00
Adjusting Entries:
Office Supplies Expense 240
Office Supplies 150
Transportation Expense 206
Freight In 220
Advances 1,380
Cash Shortage 84
Petty Cash Fund 2,280
7.
ANSWERS: B, C, A, D
Proof of Cash
Nov. 30 Receipts Disbursement Dec. 31
Unadjusted Book Balance 39,300 183,900 101,800 121,400
Bank charges
November (300) (300)
December 400 (400)
Customer’s note collected by
bank 25,000 (25,000)
NSF Checks 6,000 (6,000)
Book error – uncollected
customer’s note treated as
receipt (30,000) (30,000)
Error on recording check (8,910) 8,910
Adjusted Cash Balances 64,000 128,900 98,990 93,910