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Audit of Cash and Equivalents for Corporations

1. The document provides instructions for an assignment that is due on March 6 by 7PM and requires submitting solutions with name written at the top. 2. The first problem lists 14 cash and cash equivalent accounts for Batangas Corporation and asks to compute the total that would be reported on the December 31, 2020 balance sheet based on audit results. 3. The second problem provides trial balance information for Baguio Corporation's cash accounts as of December 31, 2020 and additional details to determine the adjusted balances of cash on hand, petty cash fund, BPI current account, and total cash and cash equivalents.

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Hiyakishu San
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220 views2 pages

Audit of Cash and Equivalents for Corporations

1. The document provides instructions for an assignment that is due on March 6 by 7PM and requires submitting solutions with name written at the top. 2. The first problem lists 14 cash and cash equivalent accounts for Batangas Corporation and asks to compute the total that would be reported on the December 31, 2020 balance sheet based on audit results. 3. The second problem provides trial balance information for Baguio Corporation's cash accounts as of December 31, 2020 and additional details to determine the adjusted balances of cash on hand, petty cash fund, BPI current account, and total cash and cash equivalents.

Uploaded by

Hiyakishu San
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
  • Activity #1
  • Problem Details

BSACC 3

March 6, 2021
Activity #1

Instructions:
1. Submit your answers with solutions today, March 6, on or before 7PM.
2. Write your name on the top of the solution submitted.

PROBLEM 1:

In connection with your audit of Batangas Corporation for the year ended December 31, 2020, you
gathered the following:

1. Current account at BDO P2,500,000


2. Current account at BPI (200,000)
3. Payroll account 600,000
4. Foreign bank account - restricted (in equivalent pesos) 570,000
5. Postage stamps 2,000
6. Employee's post dated check 3,000
7. IOU from controller's sister 10,000
8. Credit memo from a vendor for a purchase return 20,000
9. Traveler's check 50,000
10. Not-sufficient-funds check 12,000
11. Money order 15,000
12. Petty cash fund (4,000 in currency and expense receipts for 6,000) 10,000
13. Treasury bills, due 3/31/21 (purchased 12/31/20) 200,000
14. Treasury bills, due 1/31/21 (purchased 1/1/20) 300,000

Question:

Based on the above information and the result of your audit, compute the cash and cash equivalent
that would be reported on December 31, 2020 balance sheet.

PROBLEM 2:

You were able to gather the following from the December 31, 2020 trial balance of Baguio
Corporation in connection with your audit of the company:

Cash on hand P500,000


Petty cash fund 10,000
BPI current account 1,000,000
Security Bank current account No. 01 1,080,000
Security Bank current account No. 02 (80,000)
PNB savings account 1,200,000
PNB time deposit 500,000

Cash on hand includes the following items:


a. Customer’s check for P40,000 returned by bank on December 26, 2020 due to insufficient funds
but subsequently redeposited and cleared by the bank on January 8, 2021.
b. Customer’s check for P20,000 dated January 2, 2021, received on December 29, 2020.
c. Postal money orders received from customers, P30,000.

The petty cash fund consisted of the following items as of December 31, 2020.
Currency and coins P2,000
Employees’ vales 1,600
Currency in an envelope marked “collections for charity” with names attached 1,200
Unreplenished petty cash vouchers 1,300
Check drawn by Baguio Corporation, payable to the petty cashier 4,000

Included among the checks drawn by Baguio Corporation against the BPI current account and
recorded in December 2020 are the following:
a. Check written and dated December 29, 2020 and delivered to payee on January 2, 2021,
P80,000.
b. Check written on December 27, 2020, dated January 2, 2021, delivered to payee on December
29, 2020, P40,000.

The credit balance in the Security Bank current account No. 2 represents checks drawn in excess of
the deposit balance. These checks were still outstanding at December 31, 2020.

The savings account deposit in PNB has been set aside by the board of directors for acquisition of
new equipment. This account is expected to be disbursed in the next 3 months from the balance
sheet date.

Based on the above and the result of your audit, determine the adjusted balances of following:
1. Cash on hand
2. Petty cash fund
3. BPI current account
4. Cash and cash equivalents

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