Practice Set 1 √

The auditor for SAMANTHA, INC. examined the petty cash fund immediately after the close of
business, July 31, 2014, the end o the company’s natural business year. The petty cash custodian
presented the following during the count:

Currency P1,650
Petty cash vouchers:
Postage 420
Office supplies expense 900
Transportation expense 340
Computer repairs 800
Advances to office staff 1,500
A check drawn by Samantha, Inc., payable to the
petty cash custodian 7,200
Postage stamps 300
An employee’s check, returned by bank, marked NSF 1,000
An envelope containing currency of P1,890 for a gift for
A retiring employee 1,890
P16,000

The general ledger shows an imprest petty cash fund balance of P16,000.

1. How much is the petty cash shortage or overage?

Currency P1,650
Add: Petty cash vouchers:
Postage P420
Office supplies expense P900
Transportation expense P340
Computer repairs P800
Advances to office staff P1,500 P3,960
Add: Replenishment check P7,200
Add: Employee’s NSF check P1,000
Petty cash accounted P13,810
Less: Petty cash fund per ledger P16,000
Petty cash shortage P2,190

2. What is the adjusted balance of the petty cash fund at July 31, 2014?
Currency P1,650
Add: Replenishment check P7,200
Adjusted petty cash balance P8,850

Practice Set 2 √
In connection with your audit of the financial statements of BENJAMIN CORP. for the year
ended December 31, 2014, you conducted a surprise count of the company’s petty cash fund and
undeposited collections at 8:20 a.m. January 3, 2015. Your count disclosed the following:

Bills and coins

Bills Coins
P100.00 5 pieces 5.00 18 pieces
 50.00 40 pieces 1.00 206 pieces
20.00 48 pieces 0.25 32 pieces

Postage stamps (unused) - P3 65

Checks
Date Payee Maker Amount
Dec. 30 Cash Custodian P1,200
Dec. 30 Benjamin Corp. SLV, Inc. 14,000
Dec. 31 Benjamin Corp. Mario Lansang,
sales manager 1,680
Dec. 31 Benjamin Corp. MSU Corp. 17,800
Dec. 31 Benjamin Corp. Ateneo, Inc. 8,300
Dec. 31 Taiwan Corp. Benjamin Corp. 27,000

Unreimbursed vouchers
Date Payee Description Amount
Dec. 23 Mario Lansang, Advance for trip to P20,000
sales manager Tagaytay City
28 Central Post Office Postage stamps 1,620
29 Messengers Transportation 150
29 Byte, Inc. Computer repair 800

Other items found inside the cash box:

1. Unclaimed pay envelope of Juan MacDonut. Indicated on the pay slip is his net salary of
P7,500. Your inquiry revealed that Juan’s salary is mingled with the petty cash fund.
2. The sales manager’s liquidation report for his Tagaytay City trip.
Cash advance received on Dec. 23 P20,000
Less: Hotel accommodation, meals, etc. P16,000
Bus fare for two 1,200
Cash given to Pablo, salesman 1,000 18,200
Balance P1,800

Accounted for as follows:

Cash returned by Pablo to the sales manager P120
Personal check of the sales manager 1,680
Total P1,800

Additional information:
1. The custodian is not authorized to cash checks.
2. The last official receipts included in the deposit on December 30 is No. 4351 and the
last official receipt issued for the current year is No. 4355. The following official
receipts are all dated December 31, 2014.
OR No. Amount Form of Payment
4352 P13,600 Cash
4353 17,800 Check
4354 3,600 Cash
4355 8,300 Check
3. The petty cash balance per general ledger is P25,000. The last replenishment of the
fund was made on December 22, 2014.

1. What is the amount of shortage due from the sales manager?

A. P240 C. P120
B. P1,800 D. P0
Cash advance P20,000
Less: Actual cash disbursed:
Hotel accomodation, meals, etc. P6,000
Bus fare for two P1,200
Cash given to and returned by Pablo (P1,000 – P120) P880 (P18,080)
Cash that should be returned P1,920
Less: Cash actually returned (P1,680)
Shortage due from sales manager P240

2. What is the amount of undeposited collections on December 31, 2014?

A. P44,300 C. P57,300
B. P84,300 D. P41,000
Total collections for OR nos. 4352 - 4355 P43,300
Add: Unreceipted collection from SLV Inc. P14,000
Undeposited collections P57,300

3. The adjusting entries on December 31, 2014 should include a net debit to Travel
expenses of:
A. P17,320 C. P18,200
B. P18,320 D. P18,080 (P16,000 + P1,200 + P880)

4. The cash count should include total checks of:

A. P69,980 C. P41,780
B. P42,980 (1,200 + 14,000 + 1,680 + 17,800 +8,300) D. P41,300

5. What is the total cash shortage?

A. P22,166 C. P22,406
B. P8,166 D. P20,486
Total bills and coins P3,764
Add: Checks from December 30 –31 (Custodian – Ateneo Inc.) P42,980
Add: Total unreimbursed vouchers P22,570
Less: Accountabilities:
Unreceipted collection fro SLV Inc. P14,000
Unclaimed salary of Juan Macdonut P7,500
Excess travel advance P1,680
Collections from OR nos. 4352-4255 P43,300
Petty cash fund P25,000 (P91,480)
Cash Shortage P22,166

Practice Set 3 √
Anying Velasco is reviewing the cash accounting for ABX, Inc. Anying’s review will focus on
the petty cash fund account and the bank reconciliation for the month ended May 31, 2014. She
has collected the following information from ABX’s bookkeeper for this task.

Petty Cash Fund

1. The petty cash fund was established on May 2, 2014, in the amount of P10,000.
2. Expenditures from the fund by the custodian as of May 31, 2014, were evidenced by
approved petty cash vouchers for the following:
 Various office supplies P3,920
IOU from employees 1,200
Shipping charges 2,298
Miscellaneous expense 1,526

On May 31, 2014, the petty cash fund was replenished and increased to P12,000;
currency and coin in the fund at that time totaled P756.

Bank Reconciliation
Shore Bank
Bank Statement

Disbursements Receipts Balance

Balance, May 1, 2014-12-08 P350,760
Deposits P1,120,000
Note payment direct from
Customer (interest of P1,200) P37,200
Checks cleared during May P1,246,000
Bank service charges P1,080
Balance, May 31, 2014 P260,880

ABX, Inc.’s Cash Account

Balance, May 1, 2014 P354,000
Deposits during May 2014 + 1,240,000
Checks written during May 2014 - 1,273,400

Deposits in transit are determined to be P120,000, and checks outstanding at May 31 total
P34,000. Cash on hand (besides petty cash) at May 31, 2014, is P9,840.

1. What is the amount of petty cash shortage? P300

Coins and currency P756
Add: Expenditures from the fund by custodian:
Various office supplies P3,920
IOU from employees P1,200
Shipping charges P2,298
Miscellaneous expense P1,526 P8,944
Petty cash accounted P9,700
Less: Custodian’s accountability (P10,000)
Petty cash shortage (P300)

2. The journal entry to record the replenishment of, and increase in the petty cash fund
includes a credit to? Cash of P11,244
Petty cash fund P2,000
Add: Accounts receivable P3,920
Receivable from employees P1,200
Shipping charges P2,298
Miscellaneous expense P1,526
Cash shortage P300 P9,244
Cash P11,244
 3. The amount of cash should be reported in the May 31, 2014, statement of financial
position? P368,720
Book Bank
Unadjusted balances P320,600 P260,880
Deposit in Transit P120,000
Cash On Hand P9,840
Outstanding checks (P34,000)
Note collected by bank P37,200
Bank service charges (P1,080)
Adjusted cash balance P356,720 P356,720

Cash (adjusted cash balance P356,720 + petty cash fund increase P12,000) P368,720

PRACTICE SET 4 √
The following data were taken from GARAY’s check register for the months of April. Garays’s
bank reconciliation for March showed one outstanding check, check No. 178 for P2,150 (written
on March 20), and one deposit in transit for P4,350 (made on March 31).

Date Item Checks Deposits Balance

2014
April1 Beginning Balance 6,150
1 Deposit 26,167 32,317
1 Check No. 179 250 32,567
4 Check No. 180 10,673 21,898
27 Deposit 11,774 33,672
29 Check No. 181 13,217 20,490

The following is from Garay’s bank statement for April:

Date Item Checks Deposits Balance

2014
April1 Beginning Balance 3,950
3 Check No. 179 250 3,700
3 Deposit 4,350 8,050
5 Check No. 180 10,673 (2,623)
5 Automatic loan 8,150 5,527
5 Deposit 26,417 31,944
20 NSF check 1,000 30,944
20 Service charge 600 30,344
30 Interest 82 30,426

Assume that any errors or discrepancies you find are Garay’s, not the bank’s.

What is the adjusted cash balance as of April 30?

Book Bank
Unadjusted balances P20,490 P30,426
Outstanding checks:
Check no. 178 P2, 150
Check no. 181 P13,217 (15,367)
Deposit in transit P11,774
Recording of deposit - error (26,417 – 26,167) P250
Automatic loan P8,150
Interest P82
NSF check (P1,000)
Bank service charge (P600)
Arithmetic error for:
Check no. 179 (32,567 – 32,067) (P500)
Check no. 180 (21,898 – 21,894) (P4)
Check no. 181 (20,490 – 20,455) (P35)
Adjusted balances P26,833 P26,833

PRACTICE SET 5 √
The bank statement for the current account of IAN CO. showed a December 31, 2014, balance of
P585,284. Information that might be useful in preparing a bank reconciliation is as follows:

a. Outstanding checks were P52,810.

b. The December 31, 2014, cash receipts of P23,000 were not deposited in the bank until
January 2, 2015.
c. One check written in payment of rent P8,940 was correctly recorded by the bank but was
recorded by Ian Co. as a P9,840 disbursement.
d. In accordance with prior authorization, the bank withdrew P18,000 directly from the
current account as payment on a mortgage note payable. The interest portion of that
payment was P14,000. Ian Co. has made no entry to record the automatic payment.
e. Bank service charges of P740 were listed on the bank statement.
f. A deposit of P35,000 was recorded by the bank on December 12, but it did not belong to
Ian Co.
g. The bank statement included a charge of P3,400 for a non-sufficient-fund check. The
company will seek payment from the customer.
h. Ian Co. maintains an P8,000 petty cash fund that was appropriately reimbursed at the end
of December.
i. According to instructions from Ian Co. on December 30, the bank withdrew P40,000
from the account and purchased treasury bills for Ian Co. The company recorded the
transaction in its books on December 31 when it received notice from the bank. Half of
the treasury bills mature in three months and the other half in six months.

1. What is the cash in bank balance per books on December 31, 2014?
Balance per bank statement P585,284
Add: Undeposited collections P23,000
Automatic payment for mortgage P18,000
Bank service charge P740
NSF check P3,400 P45,140
Less: Outstanding checks (P52,810)
Error recording rent check (9,840-8,940) (P900)
Incorrect bank deposit (P35,000) (P88,710)
Balance per books P541,714

2. What is the adjusted cash in bank balance on December 31, 2014?

Book Bank
Unadjusted balances P541,714 P 585,284
Outstanding checks (P52,810)
Undeposited collections P23,000
Error in recording the rent check (9,840-8,940) 900
Automatic payment for mortgage (P18,000)
Bank service charge (P740)
Incorrect bank deposit (P35,000)
NSF check (P3,400)
Adjusted balances P520,474 P520,474

3. What amount would Ian Co. report as cash and cash equivalents in the current assets
section of the December 31, 2014, statement of financial position? 728,474
Current account balance P520,474
Add: Petty cash fund P8,000
Treasury bills (400,000 * 1/2) P20,000 P28,000
Total cash and cash equivalents P548,474

PRACTICE SET 6 √
The cash account of ABC COMPANY shows the following activities:

Date Debit Credit Balance

Nov. 30 Balance P115,000
Dec. 2 November bank charges P50 114,950
4 November bank credit for
notes receivable collected P10,000 124,950
15 NSF check 1300 123,650
20 Loan proceeds 48,500 172,150
21 December bank charges 60 172,090
31 Cash receipts book 707,300 879,390
31 Cash disbursements book 408,000 471,390

CASH BOOK

RECEIPTS PAYMENTS
Date OR No. Amount Check No. Amount

Dec. 1 110-120 P11,000 801 P2,000

2 121-136 21,300 802 3,000
3 137-150 20,000 803 1,000
4 151-165 56,000 804 3,000
5 166-190 39,000 805 12,000
8 191-210 66,000 806 19,000
9 211-232 88,000 807 26,000
10 233-250 77,000 808 30,000
11 251-275 21,000 809 61,000
12 276-300 30,000 810 7,000
15 301-309 55,000 811 8,000
16 310-350 8,000 812 16,000
17 351-390 19,000 813 20,000
18 391-420 9,000 814 22,000
19 421-480 17,000 816 36,000
22 481-500 21,000 817 11,000
23 501-525 32,000 818 50,000
23 - - 819 7,000
23 - - 820 4,000
26 526-555 74,000 821 3,000
28 556-611 5,000 822 12,000
28 - - 823 13,000
29 612-630 38,000 824 29,000
29 - - 825 2,000
29 - - 826 11,000
Totals P707,300 P408,000

BANK STATEMENT

Date Check No. Charges Credits

Dec. 1 792 P 2,500 P8,500
2 802 3,000 11,000
3 - - 21,300
4 804 3,000 20,000
5 EC 81,000 81,000
8 805 12,000 95,000
9 CM 16 - 12,000
10 799 7,050 154,000
11 DM 57 1,300 77,000
12 808 30,000 21,000
15 803 1,000 -
16 809 61,000 85,000
17 DM 61 60 8,000
18 813 20,000 19,000
19 CM 20 - 48,500
22 815 6,000 -
23 816 36,000 47,000
23 811 8,000 -
23 801 2,000 -
26 814 22,000 32,000
28 818 50,000 74,000
28 DM 112 120 -
29 821 3,000 5,000
29 CM 36 - 12,000
29 820 4,000 -_______
Totals P353,030 P831,300

Additional Information:

1. DMs 61 and 112 are for service charges.

2. EC is error corrected.
3. DM 57 is for an NSF check.
4. CM 20 is for loan proceeds, net of P150 interest charges for 90 days.
5. CM 16 is for the correction of an erroneous November bank charge.
6. CM 36 is for customer’s note collected by bank in December.
7. Bank balance on December 31 is P592,270.

1. The total outstanding checks at November 30 should be:

Check no. 792 P2,500
Check no. 799 P7,050
Outstanding checks P9,550

2. The total outstanding checks at December 31 should be:

Check no. 806 P19,000
Check no. 807 P26,000
Check no. 810 P7,000
Check no. 812 P16,000
Check no. 817 P11,000
Check no. 819 P7,000
Check no. 822 P12,000
Check no. 823 P13,000
Check no. 824 P29,000
Check no. 825 P2,000
Check no. 826 P11,000
Outstanding checks P153,000

3. The deposit in transit at November 30 should be: P8,500

4. The deposit in transit at December 31 should be:
Deposit in transit, November 30 P8,500
Add: Collections per cash receipts book P707,300
Total P715,800
Less: Deposits credited by bank:
Bank receipts P831,300
Correction of erroneous bank charge in December (P81,000)
Correction of erroneous bank charge in November (P12,000)
Loan proceeds (48,500)
Noted collected (P12,000) (P677,800)
Deposit in transit, December 31 P38,000

5. The adjusted book balance at November 30 should be: P124,950

6. The adjusted bank receipts for the month of December should be: P767,800
7. The adjusted book disbursements for the month of December should be: P415,480
8. The adjusted bank balance at December 31 should be: P477,270

PROOF OF CASH
December 1-31

Balance Nov.30 Receipts Disbursements Balance, Dec 31

Balances per bank P114,000 P831,300 P353,030 P592,270

Bank error corrected (P81,000) (P81,000)
the same date
Erroneous bank charge P12,000 (P12,000)
in November
Deposits in transit:
November 30 P8,500 (P8,500)
December 31 P38,000 P38,000
Outstanding checks:
November 30 (P9,550) (P9,550)
December 31 153,000 (P153,000)

Adjusted bank balances P124,950 P767,800 P415,480 P477,270

Balance Nov.31 Receipts Disbursements Balance, Dec 31

Balances per book P115,000 P765,800 P409,410 P471,300

Bank service charges:
November 30 (P50) (P50)
December 31 P120 (P120)
Notes collected by bank:
November 30 P10,000 (P10,000)
December 31 P12,000 P12,000
Unrecorded disbursement
- Check no. 815 P6,000 (P6,000)

Adjusted bank balances P124,950 P767,800 P415,480 P477,270