V – 1.

Solution: Plaridel Glass Company

Requirement (1)

Plaridel Glass Company

Cash Count Sheet
1-4 X7

Bills Denomination Quantity Amount Total

P50 2 P 100.00
20 9 180.00
10 13 130.00 P 410.00
Fractional denominations
and coins
5.00 5 P 25.00
1.00 74 74.00
0.25 282 70.50
0.10 515 51.50
0.05 649 32.45 253.45
Total Bills & Coins P 663.45

Cash Items:
Check for deposit

Date Maker Payee

12/23/X6 J. Cruz Plaridel Glass Co. P 60.00
12/26/X6 M. Lim Plaridel Glass Co. 40.00 100.00

Unreplenished Vouchers

Date Payee Particulars

12/19/X6 Rosario & Co. Supplies P 14.50
12/18/X6 Victory Liner Freight-in 18.25
12/18/X6 Bureau of Posts Supplies 30.00
12/20/X6 A. Vallo Repairs 45.00
12/21/X6 B. Tello Miscellaneous 15.40 123.15
Advances or IOU’s

Date Payee
12/16/X6 L. Bilbao P 10.00
12/20/X6 A.David 35.00
12/20/X6 R.Tirao 25.00
12/20/X6 Pedro Munar 15.00 85.00

Total amount of fund per count P 971.60

Total amount of fund per books or receipts: p 900.00
Petty Cash Fund per ledger 58.00
Unclaimed Wages per opened envelopes
Undeposited collections
Cash sales 1/2/X7 P 865.00
Less: Amount deposited 765.00 100.00

P 1,056.00
Shortage P (86.40)

I certify that the above fund of P971.60 was countd in my presence by (name of auditor) of
Reyes, Tan, and Associate, CPAs on January 4, 20X7 at 9:00 A.M. and was returned to me intact.
MILA LIM
______________
Cashier
Requirements (2)

Adjusting journals
1. Supplies Expense (P14.50+P30) P44.50
Freight in 18.25
Repairs and Maintenance 45.00
Miscellaneous Expense 15.00
Petty Cash Fund
123.15

2. Advances to Employees 85.00

Petty Cash Fund 85.00
3. Cash in Bank 58.00
Salaries Payable 58.00
4. Accounts Receivable 86.40
Petty Cash Fund 86.40
Advances or IOU’s

Date Payee
12/16/X6 L. Bilbao P 10.00
12/20/X6 A.David 35.00
12/20/X6 R.Tirao 25.00
12/20/X6 Pedro Munar 15.00 85.00

Total amount of fund per count P 971.60

Total amount of fund per books or receipts: p 900.00
Petty Cash Fund per ledger 58.00
Unclaimed Wages per opened envelopes
Undeposited collections
Cash sales 1/2/X7 P 865.00
Less: Amount deposited 765.00 100.00

P 1,056.00
Shortage P (86.40)

I certify that the above fund of P971.60 was countd in my presence by (name of auditor) of
Reyes, Tan, and Associate, CPAs on January 4, 20X7 at 9:00 A.M. and was returned to me intact.
MILA LIM
______________
Cashier
Requirements (2)

Adjusting journals
1. Supplies Expense (P14.50+P30) P44.50
Freight in 18.25
Repairs and Maintenance 45.00
Miscellaneous Expense 15.00
Petty Cash Fund
123.15

2. Advances to Employees 85.00

Petty Cash Fund 85.00
3. Cash in Bank 58.00
Salaries Payable 58.00
4. Accounts Receivable 86.40
Petty Cash Fund 86.40
V – 2. Solution: Pampanga Company

Requirements (1)
Prop composition of the Fund, 11/10/X7

Currency and coins P 22,000

Cashed checks 5,000
Vouchers 7,400
NSF checks 2,600

Total
Less: Petty cash receipt vouchers
Return of expense advance P 2,000
Sale of money orders 1,000 3,000
Balance of Fund per count P 34,000
Balance of Fund per records 50,000
Shortage (P 16,000)

The cashier attempted to conceal the shortage by:

1. Adding instead of deducting the cash received thereby

overstating the accounting of the fund by 6,000
2. Submitting blank money orders claimed to have been
purchased 6,000
3. Submitting additional vouchers claimed to have been
misplace 4,000
Totals P 16,000

Requirements (2)

Audit Procedures

a. Cashed Checks
1. Examine checks as to payee, date, endorsement and subsequent deposit.
2. Determine if checks were cashed with prior approval of a responsible official.
b. Vouchers not yet replenish
1. Vouch supporting documents, invoices, etc.
2. Examine vouchers as to approval by authorized officials, signature of payee, etc.

c. NSF checks
1. Determine reasons why NSF checks are still on hand.
2. Confirm directly with drawers.

d. Return of excess travel advance

1. Examine liquidation of travel advance as reported and determine accuracy of the
amount returned.
2. Vouch supporting invoices.

e. Sale of money orders

1. Examine the latest report of the Pampanga Company to establish proper
accountability.
2. Confirm directly with the Pampanga Company all unreported money orders sold
as well as unissued as of November 10.

f. Vouchers subsequently presented

1. Examine vouchers as to date, approval amount, and nature of expenditure.
2. Confirm directly with employees those items representing wage advance.

g. Book balance of the Petty Cash Fund

1. Trace to the general ledger the balance of the fund.
V – 3. Solution: Heroes Group Company

Requirement 1

HEROES GROUP CO.

Bank Reconciliation Statement
For the month ended December 31, 20X7

Nov. 30 DECEMBER Dec. 31

Balance Receipts Disbursement Balance
Balance per bank P 15,300 P 20,800 P 10,200 P 25,900
Deposit in transit:
November 30 4,000 (4,000)
December 31 10,980 10,980

Outstanding checks:
November 30 (8,500) (8,500)
December 31 18,089 (18,089)

Bank Service Charge

November 30 60 60
December 31 (80) 80

Check charged by
bank in error to
client's account 2,000 (2,000)

NSF check returned (1,200) 1,200

by bank

Collection of note "'(5,000) 5,000

by bank

Customer's note with

bank recorded by
client 6,000 6,000

Customer's erroneously
recorded by client:
Correct amount P 198
Recorded as 1,980 1,782 (1,782)
Balance per books P 7,860 P 36,780 P 20,360 P 24,280
 Requirement 2 - a

Computation of Deposit in Transit, December 31, 20X7:

Total receipts per books P 36,780

Less: Notes collected by bank in November P 5,000
Notes with bank treated as receipt by client 6,000 11,000
P 25,780
Receipts for December per books
Less: Receipts for December per bank
Total receipts per bank P 20,800
Less: Deposit in Transit P 4,000
Check erroneously
charged by bank in
November 2,000 6,000 14,800
Deposit in transit, 12-31-X7 P 10,980

Requirement 2 - b

Computation of Outstanding checks, December 31, 20X7

Total disbursements per books P 20,360

Less: Bank charges in November P 60
Error in recording check:
Recorded as P 1,980
Should be 198 1,782 1,842
Disbursements for December per books P 18,518
Less: Disbursements for December per bank
Total bank debits
Less: NSF clerk returned P 1,200 P 10,200
Bank charge, December 80
Outstanding check, Nov. 30 8,500 9,780 420
Outstanding Checks, 12-31-X7 P 18,098

V – 4. Solution: Panay Company

 PANAY COMPANY
Proof of Cash
For the month ended September 30, 20X6
Aug. 31 SEPTEMBER Sept. 30
Balances Receipts Disbursements Balances
Unadjusted Bank
Balance: P 14,010 P 281,070 P 275,450 P 19,630
Deposit in Transit:
August 31 2,740 (2,740)
September 30 3,110
Outstanding checks:
August 31 (4,260) (4,620)
September 30
(net of certified check of
P 700) 3,170 (3,170)
Check of Panay Co.
erroneously charged to
client's account (2,010) 2,010
Adjusted Bank Balance P 12,490 P 281,440 P 272,350 P 21,580
Unadjusted Book
Balance P 11,190 P 281,640 P 273,885 P 18,945
Collections by bank:
August 31 1,200 (1,200)
September 30 1,600 1,600
Bank charges:
August 31 (950) (950)
September 30 640 (640)
Returned NSF check
not redeposited 800 (800)
NSF check returned in
Aug. recorded in Sept. (1,050) (1,050)
Cash receipt used for
travel expense (750) (750)
Error in recording
customer's check 300 300
Error in recording
disbursement check (2,925) 2,925
Adjusted book balance P 10,390 P 281,590 P 270,400 P 21,580
Unlocated difference P 2,100 150 1,950

Adjusted Journal Entries

 1) Cash in Bank P 1,600
P
Notes Receivable 1,600

2) Bank charges 640

Cash in Bank 640

3) Accounts Receivable 800

Cash in Bank 800

4) Cash in Bank 300

Accounts Receivable 300

5) Cash in Bank 2,925

Accounts Payable 2,925

6) Traveling expenses 750

Cash in Bank 750

Note: The average of P 2,100 as of August could have been brought about by:
a. Disbursements of the Company of P 1,950 in August b8ut recorded in September.
b. Deposit of P 150 made in August but recorded in September.