Dyna Kate A.

Bartulay
33193

Audit of cash and cash equivalents:

Problem 1:

Kuton Companys checkbook balance at December 31, 2012 was 180,000. In

addition, Kuton held the following items in its safe on that date:
Check payable to Kuton dated January 2, 2013 in payment of a sale made
in December 2012, included in December 31 checkbook balance- 65,000.
Check payable to Kuton deposited December 15, but returned by the bank
DAIF- 20,000.
Check drawn on Kutons account, payable to a vendor, dated and recorded
on December 30 but not yet mailed to payee as of December 31, 2012-
15,000.

What is the correct cash balance of the company?

Reported checkbook baance: P180,000
Adjustments:
Customers postdated check included (65,000)
Customers check returned by bank (DAIF) (20,000)
Company check recorded but not mailed 15000
Cash reported on December 31, 2012 P110,000

Problem 2:
In connection with your audit of Caloocan Corporation for the year ended December
31, 2006, you gathered the following:

1. Current account at Metrobank P2,000,000

2. Current account at BPI (100,000)
3. Payroll account 500,000
4. Foreign bank account restricted (in equivalent pesos) 1,000,000
5. Postage stamps 1,000
6. Employees post dated check 4,000
7. IOU from controllers sister 10,000
8. Credit memo from a vendor for a purchase return 20,000
9. Travelers check 50,000
10. Not-sufficient-funds check 15,000
11. Money order 30,000
12. Petty cash fund
(P4,000 in currency and expense receipts for P6,000)
10,000
13. Treasury bills, due 3/31/07 (purchased 12/31/06) 200,000
14. Treasury bills, due 1/31/07 (purchased 1/1/06) 300,000
Question: Based on the above information and the result of your audit, compute for
the cash and cash equivalent that would be reported on the December 31, 2006
balance sheet.

Suggested Solution:
Current account at Metrobank P2,000,000
Payroll account 500,000
Travelers check 50,000
Money order 30,000
Petty cash fund (P4,000 in currency) 4,000
Treasury bills, due 3/31/07 (purchased 12/31/06) 200,000
Total P2,784,000