Lesson 2 AP: Audit of Cash - Problem B

Problem:

Bonjour Company
General and Petty Cash Count
Audit Year: 20x1
Date of Count: January 5, 20x2, 10:00am

Bills and Coins
Denomination          Pieces
   P 500                       218
      100                       454
        50                       610
        20                    1,008
        10                         20
         5                        608
         1                     1,040
          0.25               4,032

Checks
Maker                       Payee                              Date                             Amount
Tissot - Customer     Bonjour Company          12/30/20x1                P 23,840
Castro - Customer    Bonjour Company          12/26/20x1                   25,010
Allez - Customer      Bonjour Company          1/2/20x2                       11,414
Petra - Customer      Bonjour Company          12/21/20x1                   26,700
Bonjour Company    Bonne Chance Corp.      12/27/20x1                   29,000
Salut - Officer           Bearer                             1/5/20x2                            620
Bueno*                      Cash                               12/29/20x1                        520
*Amount is for a return of travel advance made to the employee in an earlier period.

Vouchers and IOUS
Paid to                                   Date                                 Amount
BWD                                   1/2/20x2                         P         70
BENECO                            12/20/20x1                               300
Eurotel - Christmas Party   12/23/20x1                          12,580
Vina - IOU                          12/27/20x1                               600

Additional Notes: (mga ebidensya ng cash transactions ukol sa binilang)
1. Cash sales invoice (all currencies, No. 17903 to 18112), P 201,000.
2. Official Receipts
        Number                    Amount                   Form of Collection
        31250                      P    1,120                  Cash
        31251                          25,010                  Check
        31252                            2,404                  Cash
        31253                          23,840                  Check
        31254                          26,700                  Check
3. Stamps of various denomination amounted to P 160.
4. A notation on an envelope is "Proceeds from employee contribution for Christmas Party, P 19,000".
5. Petty cash per ledger, P 30,000.

Questions:
1. How much is the petty cash shortage as of January 5, 20x2?
2. What is the credit adjustment to correct the petty cash fund?
3. What is the adjusted petty cash fund as of December 31, 20x1?

Solution:
1. Accountability: (ano ang dapat na meron)
    Cash receipts, undeposited                          P  201,000   from sales invoice No. 17903 to 18112
    Cash and Check receipts, undeposited              79,074   from OR No. 31250-31254
    Check of Allez - Customer, undeposited           11,414   unrecorded check
    Check of Salut - Officer, undeposited                    620    in payment of an IOU
    Check of Bueno - Employee, undeposited             520   to reimburse the entity's unused fund      
    Petty cash per ledger                                          30,000   must account the fund's disbursements
    Proceeds for Christmas Party                             19,000   the amount must be intact
    Total Accountability                                    P   341,628

    Accounted for:
 (yung nabilang na cash, at kung saan napadpad yung cash sa general and petty cash fund)
    Bills and Coins                                            P    210,348
    Checks                                                                 88,724
    Vouchers and IOUS                                             13,550
    Amount Accounted for                               P     312,622   

*In counting for checks, we did not include the following:
Bonjour Company    Bonne Chance Corp.      12/27/20x1   because it is an undelivered check


Accountability less Accounted for equals P 29,006 Cash Shortage as of January 5, 20x2.

*The Accountability and Accounted for amount are not absolute amounts. You may eliminate items that are surely the same in both accountability and accounted for for shorter solutions.

2. Vouchers and IOUS                                    P          970
    Cash Shortage                                                    29,006
    Credit to Petty Cash Fund                       P     29,976 

*The voucher paid to Eurotel for the Christmas Party was not included in the vouchers because the related amount disbursed came from the proceeds from employee contribution for the Christmas party and not from the petty cash fund.

*The total amount of the cash shortage is to be credited to the petty cash fund because the petty cash fund custodian is the one primarily responsible for the shortage. The receivable from petty cash custodian will be debited for this entry, and this account will be reversed when paid by such custodian or proven that it was not the fault of the custodian(it will be transferred to a loss or receivable from another employee).

3. Petty Cash Fund, per ledger                         P   30,000
    Credit to Petty Cash Fund                                 29,976
    Adjusted Petty Cash Fund, 12/21/20x1    P          24

Refer to: http://nerdtayo.blogspot.com/2014/01/lesson-2-ap-audit-of-cash-and-cash.html

Sources: Financial Accounting 1 (Valix et. al), Advanced Auditing (Espenilla) & The Accounting Standards