As part of your engagement to audit the financial statements of ABC Company for the year ended

December 31, 2018, you were assigned to verify the petty cash fund and the cash on hand in the
morning of January 31, 2019. You began to count at 9:00 A.M. in the presence of W. Ally, the petty cash
custodian. In the course of your counting, you found the following items:

Bills:
1- two hundreds, 20 one hundreds, 40 twenties
Coins:
10.00 10 rolls ( 10 pieces to a roll)
5.00 9 rolls ( 50 pieces to a roll)
1.00 8 rolls and 4 loose (100 pieces to a roll)
0.25 7 rolls and 10 loose (200 pieces to a roll)
0.10 5 rolls and 20 loose (300 pieces to a roll)
0.05 4 rolls and 10 loose (200 pieces to a roll)

Checks:

Maker Date Payee Amount

Jose Manalo, Manager 12/05/2018 ABC Company 800
W. Ally, Petty Cash Custodian 12/28/2018 ABC Company 500

Note: Jose Manalo’s check was returned on December 29,2018 for insufficiency of fund.

I.O.U’s Date Amount

A. Braham, janitor 12/19/2018 250
R. Tica, clerk 12/20/2018 250
P.Du, Bookkeeper 12/22/2018 200

Petty Cash Vouchers for replenishment:

Payee Date Account charged Amount

J.Cruz, messenger 12/14/2018 Advances to employees 125.00
Cid bookstore 12/15/2018 Supplies 150.00
Dalin Liner 12/19/2018 Freight-out 192.00
Bureau of Posts
(stamps) Supplies 300.00
A.Bala Carpenter Repairs 450.00
B. Go Miscellaneous expense 154.00

Unused stamps:
Various denominations ₱50.00

Additional Information:

1. The balance of petty cash fund per books is ₱12,000.

2. Cash sales of January 2, 2019 amounted to ₱8,000 per sales records, while cash receipts book
and deposit slip showed that only ₱6,600 was deposited in the bank on January 3, 2019.

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 3. The following employees’ pay envelopes have been opened and the money removed. Each
envelope was marked “unclaimed.”
D. Bill ₱400
G. Ng ₱200

Required:

1. Prepared working papers showing your cash count.

2. Prepare necessary adjusting journal entries as of December 31, 2018.
3. Determine the amount at which the Petty Cash Fund will be stated in the statement of financial
position as of December 31, 2018.

Requirement No.1

Currencies 3,000
Coins 450
A check drawn by the company payable
to the order of the petty cash custodian,
representing her salary 3,800
Adjusted Petty Cash Fund 7,250

Requirement No.2
Petty Cash Accounted:

Currencies 3000
Coins 450
Petty Cash Vouchers:
Transportation 650
Office Supplies 160
Repair of computer 400
Loans to employees 600
Miscellaneous expenses 240
Postage 200
A check drawn by the company payable to the
order of the petty cash custodian, representing
her salary 3800
An employee’s check returned by the bank
because of insufficient funds 1200
A piece of paper with names of several
employees together with contribution for a
wedding gift for an employee 500 11,200
Less: Petty Cash Accountabilities
PCF imprest balance 10,000
A piece of paper with names of several
employees together with a contribution for a
wedding gift for an employee 500 10,500
Petty Cash Overage 700
Requirement 3: Adjusting Entries

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 1. Transportation expense 650
Office Supplies Expense 160
Repairs Expense 400
Advances to Employees 600
Miscellaneous expense 240
Postage 200
Petty Cash Fund 2,250

2. Unused stamps 50
Postage 50

3. Petty Cash Fund 700

Miscellaneous Income 700

4. Advances to employees 1,200

Petty Cash Fund 1,200

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