AUDIT OF CASH – PROBLEMS

1.€€The following data pertains to Apple Corporation on December 31, 2020:

Current account at Metrobank P 2,000,000.00
Current account at BPI ( 100,000.00 )
Payroll account 500,000.00
Foreign bank account – restricted (in equivalent pesos) 1,000,000.00
Postage Stamps 1,000.00
Employee’s PDC 4,000.00
IOU from controller’s sister 10,000.00
Credit memo from a vendor for a purchase return 20,000.00
Traveler’s check 50,000.00
Not-suffiicient-funds check 15,000.00
Money order 30,000.00
Petty cash fund (P4,000 in currency and expense receipts for P6,000) 10,000.00
Treasury bills, due 3/31/21 (purchased 12/31/20) 200,000.00
Treasury bills, due 1/31/21 (purchased 1/1/20) 300,000.00

Compute for the cash and cash equivalent that would be reported on December 31, 2020.

2. The following data pertain to Banana Corporation on December 31, 2020:

Checkbook balance P 10,000,000.00
Bank statement balance 15,000,000.00
Checkdrawn on Banana's account, payable to supplier, dated and
recorded on December 31, 2020, but not mailed until January 15, 2021 3,000,000.00
Cash in sinking fund 4,000,000.00
Money Market, three months due January 31, 2021 5,000,000.00

On December 31, 2020, how much should be reported as "cash and cash equivalent"?

3. On December 31, 2020, Caramia Company had the following cash balances:
Cash in bank P 15,000,000.00
Petty cash fund 50,000.00
Time deposit 5,000,000.00
Savings deposit 2,000,000.00

Cash in bank includes P500,000 of compensating balance against short-term borrowing

arrangement at December 31, 2020. The compensating balancce is legally restricted as to
withdrawal by Caramia. A check of P300,000 dated January 15, 2021 in payment of accounts
payable was recorded and mailed on December 31, 2020. In the current assets section of the
December 31, 2020, balance sheet, what should be reported as "cash and cash equivalent"?

4. SMAP Company had the following account balances on December 31, 2020:
Petty cash fund P 50,000.00
Cash in bank - current account 10,000,000.00
Cash in bank - payroll account 2,000,000.00
Cash on hand 500,000.00
Cash in bank - restriced account for plant additions,
expected to be disbursed in 2021 4,000,000.00
Treasury bills, due February 15, 2021 3,000,000.00

The petty cash fund includes unreplenished December 2020 petty cash expense vouchers of
P20,000 and employee IOUs of P10,000. The cash on hand includes a P100,000 check payable
to SMAP dated January 15, 2021. What should be reported as 'cash and cash equivalent' on
December 31, 2020?
5. TOKIO Corporation's checkbook balance on December 31, 2020, was P800,000. In addition,
TOKIO held the following items in its safe on December 31:
Check payable to TOKIO Corporation, dated January 2, 2021, not P 200,000.00
included in December 31 checkbook balance
Check payable to TOKIO Corporation, deposited December 20, and
included in December 31 checkbook balance, but returned on
December 30, stamped "NSF". The check was redeposited
January 2, 2021 and cleared January 7, 2021 40,000.00
Post-dated checks 15,000.00
Check drawn on TOKIO Corporation's account, payable to a vendor,
dated and recorded December 31, but not mailed until January 15, 2021 100,000.00

The proper amount to be shown as cash on TOKIO's balance sheet at December 31, 2021, is

6. You noted the following composition of HEY! SAY! JUMP! Company's "cash account" as of December 31, 2020:
Demand deposit account P 2,000,000.00
Time Deposit - 30 days 1,000,000.00
NSF check of customer 40,000.00
Money market placement (due June 30, 2021) 1,500,000.00
Savings deposit in a closed bank 100,000.00
IOU from employee 20,000.00
Pension fund 3,000,000.00
Petty cash fund 10,000.00
Customer check dated January 1, 2021 50,000.00
Customer check outstanding for 18 months 40,000.00
Total P 7,760,000.00

Additional information follows:

a) Check of P200,000 in payment of accounts payable was recorded on December 31, 2020, but mailed to
suppliers on January 5, 2021.
b) Check of P100,000 dated January 15, 2021, in payment of accounts payable was recorded and mailed on
December 31, 2020.
c) The company uses the calendar year. The cash receipts journal was held open until January 15, 2021,
during which time P400,000 was collected and recorded in December 31, 2020.

The cash and cash equivalents to be shown on the December 31, 2020, balance sheet is?

7. The following information pertains to NEWS Company as of December 31, 2020:

Cash balance per general ledger P 15,000,000.00
Cash balance per bank statement 14,550,000.00
Checks outstanding (including certified check of P100,000) 1,000,000.00
Bank service charge shown in Decembber bank statement 50,000.00
Errors made by NEWS in recording a check that cleared the bank in December
(check was drawn in December for P500,000 but recorded at P700,000) 200,000.00
Deposit in transit 1,500,000.00

At the December 31, 2020, balance sheet cash in bank should be?
8. The bookkeeper of SixTones Company recently prepared the following bank reconciliation on
December 31, 2020:

Balance per bank statement P 20,000,000.00

Add: Deposit in transit 1,500,000.00
Checkbook and other bank charges 50,000.00
Error made by SixTones in recording check #1005
(issued in December) 150,000.00
Customer check marked DAIF 500,000.00 2,200,000.00
Total 22,200,000.00
Deduct: Outstanding checks 1,900,000.00
Note collected by bank (includes P200,000 interest) 2,300,000.00 4,200,000.00
Balance per book P 18,000,000.00

SixTones has P1,000,000 cash on hand on December 31, 2020. The amount to be reported as cash on balance
sheet as of December 31, 2020, should be?

9. The petty cash fund of SnowMan Company on December 31, 2020, is composed of the following:

Coins and currencies P 14,000.00

Petty cash vouchers:
Gasoline payments 3,000.00
Supplies 1,000.00
Cash advances to employees 2,000.00 6,000.00
Employee's check returned by bank marked NSF 5,000.00
Check drawn by the Company payable to the order of Miki Sho,
petty cash custodian, representing her salary 20,000.00
A sheett of paper with names of employees together with contribution
for a birthday gift of a co-employee in the amount of 8,000.00
Total P 53,000.00

The petty cash ledger account has an imprest balance of P50,000. What is the correct amount of petty
cash on December 31, 2020?

10. The King&Princce Corporation was organized on January 3, 2020, with an authorized capital stock of
P5,000,000. At year-end of 2020, the general ledger of said Company showed the following accounts and balances:

Accounts Receivable P 200,000.00

Merchandise Inventory 250,000.00
Land 1,200,000.00
Building 1,600,000.00
Furnitures and Fixtures 400,000.00
Accounts Payable 420,000.00
Notes Payable - bank 500,000.00
Common Stock 1,500,000.00
Additional Paid-in Capital 100,000.00
Sales 5,800,000.00
Expenses paid (excluding purchases) 725,000.00
 Your review of the bank statement for December disclosed the following information
Bank Balance, December 31, 2020 P 524,500.00
Bank Service Charge 6,000.00
Deposit in transit 62,500.00
Total checks not returned by the bank 128,000.00

Your review also revealed that cash received of P62,500 on December 31, 2020, was depositted on
January 2, 2021. The Company's mark-up on sales is 40%.

How much is the adjusted cash balance as of December 31, 2020?

11. Reconciliation of Toma Corporation's bank account at November 30, 2020 follows:
Balance per bank statement P 3,150,000.00
Deposit in transit 450,000.00
Checks outstanding ( 45,000.00 )
Correct cash balance P 3,555,000.00

Balance per books P 3,558,000.00

Bank service charge ( 3,000.00 )
Correct cash balance P 3,555,000.00

December data are as follows:

BANK BOOKS
Checks recorded P 3,450,000.00 P 3,540,000.00
Deposits recorded 2,430,000.00 2,700,000.00
Collection by bank (P600,000 plus interest) 630,000.00 -
NSF check returned with December bank statement 15,000.00 -
Balances 2,745,000.00 2,715,000.00

The checks outstanding on December 31, 2020 amount to: