CHAPTER-3-Caselette-Audit-of-Cash-and-Cash-Equivalents.doc

CHAPTER 3 - Audit of Cash & Cash Equivalents Problem 1

The “CASH “CASH”” accou account nt of Don Corpor Corporati ation’ on’s s ledger ledger on Decemb December er 31, !!" !!" sho#ed sho#ed the follo#ing$ a%

&ett &ett' ' c cas ash h fun fund d (in (incl clud udin ing g &), &),*! *!! ! unr unrep eple leni nish shed ed +oucher of #hich &,!! is dated -anuar' 3, !!). & 1*,!!! b% /e /edemption 0und Account  &2 *!!,!!! c% Tra+eler’s chec4 1!!,!!! d% 5one' order 1!,!!! e% Treasur' bill, purchased December 1, !!" (due on 0eb% 1, !!). *!,!!! f% Time deposit due on 5arch 31, !!) *!,!!! g% 16!7da' Treasur' bill, due 5arch 1*, !!) 1!,!!! h% 2ote recei+able in the possession of a collecting agenc' !,!!! i% &2  Chec4ing Account 8117!!97!91 3*,9!!  :% Cash on hand, including including customer postdated postdated chec4 of &1*,!!! 3,!!! 4% Sa+ings deposit, earmar4ed for ac;uisition of e;uipment 1!,!!! l% A che chec4 c4 pa'a pa'abl ble e to to San San a t>ad:u d:ust st item item 5 is$ a% correct>ad:us ad:ustt item numbe numberr 1! is$ is$ a% Accounts pa'able *!,!!! Cash *!,!!! b% =ther liabilities *!,!!!   Ca Cash *!,!!! c% Cash *!,!!! Accounts pa'able *!,!!! d% 2o ad:u ad:ust stme ment nt 3% The entr' entr' to to correct> correct>ad:us ad:ustt item numbe numberr 1) is$ is$ a% Accounts pa'able *!,!!! 3

Cash b% Cash Accounts recei+able c% Cash Accounts pa'able d% 2o ad:ustments

*!,!!! *!,!!! *!,!!! *!,!!! *!,!!!

% The entr' to correct>ad:ust item number 1" is$ a% Accounts recei+able !,!!!   Cash !,!!! b% Cash !,!!! Accounts pa'able !,!!! c% Cash !,!!! Accounts recei+able !,!!! d% 2o ad:ustments *%