Cash and Accounts Receivable

The Reviar School of tTel. No. 735-9807{

AUDITING PROBLEIIIS

I RET{EO/ ESPENI LLA I IA]II ES CASH,AND RECEIVABLES

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PROBLEM 1: You gathered the following information in relation to your audit of SAP CORP.for the.year ended December31, 2008:

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L Traveler's check '/ l/ 2. Bank drafts and money orders 3. Unused postage stamps 4. Employeecheck dated 2009, recorded as 2008 . 5. I,OUfrom a key officer / 6. Current account at PNB Bank 7. Cuirent account at EquitableBank r' B. .Curent account at BPI - fayroll Account 9. I,eFtrictedforeign bank qccount (in USD)*x 10. Credit memo from a vendor for a purchase return ^11. Customer'S check returned by the bank marked DAUD, return not yet recorded in 2008 int 12. .Changefund 13. Bond sinking fund t6 be used to settle bonds payable due 2015 '( 14. Petty cash fund (P12,000 in currency and expense vouchers for

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18,000) fireasurybills, due 3l3Ll09 (purchasedtzl3Ll0e) Treasury 16. bifls; due tl3Ll0g (purchasedL/l/08) a L7. Other trade accountsreceivable- unassigned -. r/ta. Trade accountsreceivable- factored in 20O8,amount received from factorlngis 1,200,000,factoringnot recordedyet in 2OO8 19. Tradeaccountson whichpost-datedchecksar"eheld (no entries were made on receiptsof checks) 20. Trade r€ceivablesfrom officers drc cr,rmtly ?r, #l*rce patgn€ftsto €*lrfuson F rdre or-ebrs,M 22. Advancesto an associatedcompany 23. Credit balanceson customers'accountdue to salesreturn 24. Interest receivableon investmentin bonds 25. Interest payableon bonds 26. Subscriptlonsreceivablefrom ordinary shares due in 30 days -,i-r 27. Trade note receivables f

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P150,0001 90,00q 3,000 12,0O0 30,000 6,OO0,OOO,I (300,000) 1,500,000r1 60,000 60,000 45,000 10,0004 1,OOO,0OO 30,o001 600,0001 900,o00 2,250,OAO 1,500,00O1 225,AOO 67,500 459-ago 7,125,offi (675,OO0) 450"OOO 500,000 2,475,OOO 1,OOO,OOO

**current exchangerate as of December31, 2008 is at P50 for every USDI. 1. What is th€ tota! iash and cashequivalentto be reportedby the comparryas of -DBcember

31, 2008?

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2 . What is the total trade receivables to be reportedas of December31, 20OB? 3. How much is the total other receivablesas of December31, 2008?

PRQBLEI'| 2: You were able to gather the following from the December 31, 2008 trial balance of RHEAINC. in connectionwith your audit of the company: t

Petty cash fund Cash on hand Cash in bank - Metrbbank current Cash'in bank - BDO Acct No. 1 Cash in bank - BDO Acct No. 2 Cash in bank - Coco bank savings Time deposits - BPI

50,000 w 1,500,00p IrTo@ 4,000)0004lbo@

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4,500,000' 2,ooo,00Q

fuSAr The Review Schoolof Amuntancy The petty cash fund consisted of the iollowing items as of Decembei3l, 2008: Currency and colns P10,000q / Empfoyees'vales 10.t,vuivatdt 8,000.' Currency in an envelope m6rked "collectionsfor charity" , , with names attached 6,000 n Unreplenishedpetty cash vouchers 6,500 Check drawn by RHEA,payable to the petty cashier. 20,000{ v.d.\44 " "51'aialrat,ht,(_LrIQg_ ' Unused Postage stamps tt1vrut, alttrraq P52,000 Cash on hand represents undeposited collections as of December 31, ?008 and includes the follbwing items: a. Customer's check for P160,000 returned by bank on December 26,20O8 due to insufficient fund but subsequently redeposited and cleared by the bank on January 3,

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b. Customer's check for P80,000 dated January 2,2OgO, received on December 29,2008. c. A customer check for P90,000 dated June 1, 2008 received on the same date and yet to be deposited since the same has been missing. d. Postal money orders received from customers, P100,0O0. Included among the checks drawn by RHEA against the Metrobank current account and recorded in December 2OO8are the following: a. Check writteri'on Dilcember 29, 2OAA dated January 2, 2OOg, delivered to payee on December 29, 2OO8,P160,000. b. Check written and dated'December 29, 2008 and delivered to payee on January 2, 2OO9,P200,000. The credit balance in the BDO Current Account No. 2 represents checks drawrt in excess of the deposit bal4nce. These checks werb stilt outstanding at December 31, 2008. The savings account deposit in Coco Bank has been set by the board of directors fior acquisition of new computers. This account is expected to be disbursed in the next 3 months from the

balancesheet date, The time depositwith BPI was purchasedon lrlorrember1, 2008 and shall rnatureon Noverfiber 1, 2OO9. DeJermine the audted balancesof the following: A r. Petty cashfund a. 30,000 b. 36,000 c, 10,000 d. 24FAO 2. cash.shortage/ov€rage Petty 0 b. 5,5OOshort a. 4,000 short c. 2,0Ooover d. 500 over 8 3 . Cashon hand a. 1,070,000 c. 1,260,000 d. 1,500,000 . b. 1,170,000 9 4. CashIn bank - Metrobankcurrent a. 4,000,000 b. 4,160,000 c. 4,200,000 d. 4,360,000 Cash 5. and cash equivalents to be reportedin the 2006 batancesheet A o. 8,560,000. b. 8,566,000 c. 10,560,000 d, 15,060,000

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A count of the Petty Cash Fund having an imprest balanceof P10,000of Reyes eBAEliEE3i Corp. showedits compositionas follows: Coinsand currency................ '7 Paidvouchers:

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3,000 11000

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cash r-eceiPtvoucher

zlt' / The petty cash receipt voucher is for a return of travel expense advance.

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' 500,'.

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RgSA:T.heReview School'of Aaountancy e Whatis the pettycashshortage?

d. 1,000

c. 9004

b. 50 0

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Ad$usud pttttyuh firilz .rt@ pROBLEM 4: A count of the undeposited receipts under the custody of U. Rita, cashier of Ube A S-ptember 30, 20OBshowed the following composition: C*p-, .\ ""