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I - AUDIT OF CASH AND CASH EQUIVALENTS PROBLEM NO. 1 - Composition of Cash and Cash Equivalents

The following data pertain to PRTC Corporation at December 31, 2015: Crrent accont at !etroban"

P 1,#00,000 Crrent accont at $llied %an" &100,000' Pa(roll accont 500,000 )oreign ban" accont &in e*i+alent peo' #00,000 a+ing depoit in a cloed ban" 150,000 Potage tamp 1,000 .mplo(ee/ potdated chec" ,000  from emplo(ee 10,000 Credit memo from a +endor for a prchae retrn 20,000 Tra+eler/ chec" 50,000 !one( order 30,000 Pett( cah fnd &P,000 in crrenc( and e4pene receipt for 10,000 P,000' Penion fnd 2,000,000 D$) chec" of ctomer 15,000 Ctomer/ chec" dated 16161 #0,000 Time depoit - 30 da( 200,000 !one( mar"et placement &de 63061' 500,000 Trear( bill, de 363161 &prchaed 12631615' 200,000 Trear( bill, de 163161 &prchaed 261615' 300,000 REQUIRED: Determine the cah and cah e*i+alent to be reported on the entit(/ December 31, 2015 tatement of financial poition7 SOLUTION:

Items included: Crrent accont at !etroban" Pa(roll accont )ore )oreiign ban" ban" acco accon ntt &in &in e*i e*i+a +allent ent pe peo' o'

1,#00,000 500, 000 #00, #00,00 000 0

Tra+eler 8 chec"

50,000

!one( order

30,000

Pett( cah fnd - crrenc( Time depoit 9 30 da(

,000 200,000 1

Trea rear r( ( bill bill, , 12631612'

de de

3631 363161 613 3

&pr &prch cha aed ed 200,000 3,5#,000

Items not included: &100,000 Crrent accont at $llied %an" ' Short term borrowing a+ing depoit in a cloed ban" 150,000 ther noncurrent assets Potage tamp 1,000 Unused supplies !ther C"# .mplo(ee8 pot dated chec" ,000 $rade and other receivables 10,  from emplo(ee 000 $rade and other receivables Credit memo from a +endor for a prchae Deduc Deducti tion on from from accou account ntss retrn 20,000 pa%able Pett( cah fnd - e4pene receipt ,000 E&penses Penion fnd 2,000,000 'oncurrent asset D$) chec" of ctomer 15,000 $rade and other receivables Ctomer 8 chec" dated 161613 #0,000 $rade and other receivables !one( mar"et placement &de 630613' 500,000 Short term investment Trea Trear( r( bill, bill, de 163161 1631613 3 &prch &prchae aed d 261612 261612'' 300,000 300,000 Short term investment

PROBLEM NO.2 - Computation of ad(usted cash and cash equivalents

o were able to gather the following from the December 31, 2015 trial balance of PRTC Corporation in connection with (or adit of the compan(: Cah on hand

P 3;2,000

Pett( cah fnd

10,000

%P crrent accont

<50,000

ecrit( %an" crrent accont =o701

1,2#0,000


&0,000'

P=% a+ing accont

500,000

P=% time depoit

300,000

Cash on hand inclde inclde the following item: 2


de de

3631 363161 613 3

&pr &prch cha aed ed 200,000 3,5#,000




P 3;2,000

Pett( cah fnd

10,000


<50,000


1,2#0,000


&0,000'


500,000

P=% time depoit

300,000


a' Ctomer/ Ctomer/ chec" chec" for P0,000 P0,000 retrned retrned b( ban" ban" on December 2, 2, 2015 de to inf infficie ficient nt fnd bt be*entl( redepoited and cleared b( the ban" on >anar( #, 2017 b' Ctomer/ chec" for P30,000 dated >anar( 2, 201, recei+ed on December 2<, 20157 c' Potal mone( order order recei+ed recei+ed from ctomer, ctomer, P3,0007 P3,0007 The pett% The pett% cash fund conited conited of the following item a of December 31, 2015: Crrenc( and coin P 2,100 .mplo(ee/ +ale 1,00 Crrenc( in an en+elope mar"ed @collection for charit(@ with name 1,200 attached nreplenihed pett( cah +ocher #00 Chec" dr drawn b( b( PR PRTC Co Corporation, pa pa(able to to th the pe pett( ca cahier ,00 P10,300

nclded among the chec" drawn b( PRTC Corporation Corporation againt againt the )*I current account and recorded in December 2015 are the following: a' Chec" written written and and dated December December 2<, 2015 and and deli+ered deli+ered to pa(ee on on >anar( >anar( 2, 201, P50,0007 b' Chec" written on December 2;, 2015dated >anar( 2, 201, deli+ered to pa(ee on December 2<, 2015, P#,0007 The credit balance in the Securit% )an+ current account =o7 =o7 2 repreent chec" drawn in e4ce of the depoit balance7 Thee chec" were till ottanding at December 31,20157 The a+ing accont deposit in *') ha *') ha been et aide b( the board of director for ac*iition of new e*ipment7 Thi accont i e4pected to be dibred in the ne4t 3 month from the balance heet date7 REQUIRED: 17 Comp Compt tee for for the ad? ad?ted ted bal balan ance ce of of fol folllowin owing: g: a7 Cah on hand b7 Pett( cah fnd c7 %P crrent accont d7 Cah and cah e* e*i+alent 27 $d?ting ent entrrie a a of of De Decembe emberr 31, 31, 2015

3

SOLUTION: Requirement 'o, -,a

Cah on hand, per trial balance &a' =) chec" &b' Potdated chec" recei+ed Cah on hand, a ad?ted "d(usting (ournal entries $ccont recei+able

3;2,00 0 &0,000 ' &30,000 ' 2#2,00 0 0,000

Cah on hand $ccont recei+able

Crrenc( in en+elope mar"ed @collection for c harit(@ nreplenihed pett( cah +ocher Pett( cah fnd, a ad?ted "lternative computation: Crrenc( and coin Replenihment chec" Pett( cah fnd, a ad?ted "d(usting (ournal entries: $d+ance to officer and emplo(ee .4pene Cah hort6o+er !balancing figure or see computation below# Pett( cah fnd &P10,000 - P,;00' Computation of shortage: Crrenc( and coin .mplo(ee/ +ale nreplenihed pett( cah +ocher Replenihment chec" Cah and cah item conted Cah accontabilit( nacconted6hortage

0,00

0

30,00

30,000

Cah on hand Requirement 'o, -,b Pett( cah fnd per total .mplo(ee/ +ale

0

' ' '

10,300 &1,00 &1,200 � ,;00 2,100 ,00 ,;00 1,00 #00 <00 3,300

'

2,100 1,00 #00 ,00 <,100 10,000 &<00

4

Requirement 'o, -,c %P crrent accont, per trial balance nreleaed chec" Pot dated chec" deli+ered %P crrent accont, a ad?ted "d(usting (ournal entries: %P crrent accont $ccont pa(able $ccont recei+able Cah on hand Requirement 'o, -,d Cah on hand &ee no7 17a' Pett( cah fnd &ee no7 17b' %P crrent accont &ee no7 17c'

0

<50,00

50,000 #,000 1,0#,00 0 50,000 0

50,00

0

#,00

0

2#2,00

#,000

,;00 1,0#,00 0

1,2#0,00 ecrit( %an" crrent accont no7 1 0 &0,000 1,20,00 ecrit( %an" crrent accont no7 2 ' 0 300,00 P=% time depoit !cash equivalent# 0 2,<1,;0 Cah and cah e*i+alent, a ad?ted 0 'ote: $he *.//0/// *') savings account should be presented separatel% from from cash and cash equivalents since it has been earmar+ed for the acquisition of a noncurrent asset,

5

PROBLEM NO. 3 1 Cash count and shortage computation

n connection with the adit of the financial tatement of Rpee Compan( for the (ear ended December 31, 2015,(o performed a rprie cont of the pett( cah fnd and ndepoited collection nder the ctod( of !7 >eie at #:15 a7m7 on >anar( 3, 3 , 2017 or or cont dicloed the following: Bills an C!ins Bills C!in s P 100 10 piece P 10 piece 1700 50 #0 piece 0750 32 piece 20 ;0 piece 0725  piece 10 5 piece Unused postage stamps 1 *23/ C"#$%s Da&# Pa'## D(a)#( A*!+n& Dec7 30 Cah !7 >eie P 2,00 Dec7 30 Rpee Compan( Robert 2#,000 Dec7 31 Rpee Compan( >a( $r, ale manager 3,30 Dec7 31 Rpee Compan( )ranci 35,00 Dec7 31 Rpee Compan( R(an 1,00 Dec7 31 Aerman Corp7 Rpee Compan( 5,000 E,#ns# V!+$"#(s Da&# Pa'## Dec7 23 >a( $r, ale manager Dec7 2; Central Pot ffice Dec7 2< !eenger Dec7 2< PC .4pre

D#s$(i&i!n A*!+n& Cah ad+ance for trip to %agio P 1,000 Cit( Potage tamp 3,20 Tranportation 300 Compter repair 1,00

ther item fond inide the cah bo4: a' Two pa( pa( en+el en+elope ope whic which h had had been been opene opened d and the cont conten ent t aggr aggreg egat atin ing g P15,0 P15,000 00 repreenting nclaimed alarie had been remo+ed7 b' The ale manager/ li*idation report for hi %agio trip: Cah ad+ance recei+ed on Dec7 23 P 1,000 Be: o otel accomodation P <,000 % fare for two #00 Cah gi+en to Ro(, aleman 00 10,00 %alance P 3,00

$cconted for a follow: Cah Cah retrne retrned d b( Ro( to the ale ale manager manager Peronal chec" of ale manager Total

P 20 3,30 P 3,00

"dditional information: a' The cto ctodia dian n i not atho athori ried ed to cah cah chec"7 chec"7 b' The lat official receipt inclded in the depoit on December 30 i =o7 351 and the lat official receipt ied for the crrent (ear i =o7 3557 The following official receipt are all dated December 31, 20157 O.R. N! N!. A*!+n& F!(* ! a'*#n& 352 P Cah 2;,200 353 35,00 Chec" 35 ;,200 Cah 355 1,00 Chec" c' The Pett( Cah Cah balance balance per general general ledger i i P20,0007 The lat repleni replenihment hment of of the fnd wa made on December 22, 20157 REQUIRED: 17 Determ Determine ine hor hortage tage or o+er o+erage age,, if an( 27 $d?t $d?ting ing entr entrie ie a of Decembe Decemberr 31, 2015 SOLUTION:

Requirement 'o, )ills and coins Denomination

Eantit(

P100700

10

50700

#0

20700

;0

10700

5

1700

10

0750

32

$mont 1,00 0 ,00 0 1,0 0 5 0 1 0 1 2

Total

1 0725





Date

Drawer

Dec7 30

!7 >eie

Dec7 30

Robert

$mont 2,0 0 2#,000

Dec7 31

>a( $r

Dec7 31

)ranci

;,5 2#

Chec+s

3,30 35,00 1,00

Dec7 31

R(an

#5,< 0

Unreplenished vouchers Date Dec7 23

$ccont $d+ance

Dec7 2;

Potage

Dec7 2<

Tranportation

Dec7 2<

$mont 1,000 3,20 300 1,00

1<,1

Repair

Total cah conted

and

cah

0

item

2#

"4E -56

112,

Be accontabilitie: Pett( cah ndepoited collection - per R ndepoited collection - withot R .4ce tra+el ad+ance retrned nclaimed alarie

00 00 00 0 00

20,0 #, 2#,0 "4E 7 3,3 "4E 3 15,0 0 32'

Cah hortage Requirement 'o, 6 $d+ance to 1 emplo(ee

officer

and

00

152,<

1,0

"4E . &0,3 "4E 8

Potage e4pene

0

3,2 30

Tranportation e4pene Repair and maintenance

0 0

1,0 0

Pett( cah fnd

1<,1

;3 2 ned potage

0 ;

Potage e4pene 3 Tra+el e4pene FP<,000GP#00G&P00-P20'H Pett( cah fnd &peronal chec" of ale manager'

30 0 0

10,1 3,3

$d+ance to officer and emplo(ee  Cah

00

5 Cah

 Cah hort6o+er & Receivable from custodian'

/ Cah

$ccont pa(able

2#,0

00

15,0

32

0,3

00

5,0

0,3

Cah 00

00 15,0

alarie pa(able 32

13,5

2#,0

$ccont recei+able 00

20

5,0

PROBLEM NO. 0 - )an+ reconciliation

The Cah in %an" accont of Dollar Compan( dicloed a balance of P203,000 a of December 317 The ban" tatement a of December 31 howed a balanced of P10,0007 pon comparing the ban" tatement with cah record, the following fact were de+eloped:


de de

3631 363161 613 3

&pr &prch cha aed ed 200,000 3,5#,000




P 3;2,000

Pett( cah fnd

10,000


<50,000


1,2#0,000


&0,000'


500,000

P=% time depoit

300,000


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