You have been assigned to audit the financial statements of SAN MIGUEL CORPORATION for the year 2017. The company is a dealer of appliances and has several branches in Metro Manila. Its main office is in Makati City. You were given by the company controller the unadjusted balances of the items to be included in the company’s statement of financial position and statement of income as of and for the year ended December 31, 2017. Audit findings are as follows: I. AUDIT OF CASH A cash count was conducted by your staff on January 7, 2018. The petty cash fund of P60,000 maintained by the company on an imprest basis reflected a balance of P22,750. Unreplenished expenses totaled P37,250 of which P9,510 pertains to January 2018. You were furnished a copy of the company’s bank reconciliation statement with BPI Bank as follows: Balance per bank P277,994 Add: Deposit in transit 248,836 Bank debit memos 712,750 Returned check 63,000 Less: Outstanding checks (174,580) Book error (72,000) Balance per books P1,056,000 Your review of the reconciliation statement disclosed the following: 1. Postdated checks totaling P107,400 were included as part of the deposit in transit. These represent collections from various customers whose accounts have been outstanding for less than three months. These checks were actually deposited on January 8, 2018. 2. Included in the deposit in transit is a check from a customer for P63,000 which was returned by the bank on December 27, 2017 for insufficiency of funds. This account has been outstanding for over six months. The check was replaced by the customer on January 15, 2018. 3. The bank debited the account of SAN MIGUEL CORP. for P710,000 as payment of notes payable including interest of P10,000 due on December 26, 2017. This was not recorded as of year-end. 4. A check was cleared by the bank as P30,900 but was recorded by the bookkeeper as P102,900. This was in payment of accounts payable. 5. Bank service charges totaling P2,750 were not recorded. 1. Petty cash fund A. P37,250 B. P60,000 C. P22,750 D. P32,260 2. Cash in bank A. P522,650 B. P450,650 C. P1,056,000 D. P244,850
You have been assigned to audit the financial statements of SAN MIGUEL CORPORATION for the
year 2017. The company is a dealer of appliances and has several branches in Metro Manila.
Its main office is in Makati City. You were given by the company controller the unadjusted
balances of the items to be included in the company’s
statement of income as of and for the year ended December 31, 2017. Audit findings are as
follows:
I. AUDIT OF CASH
A cash count was conducted by your staff on January 7, 2018. The petty cash fund of P60,000
maintained by the company on an imprest basis reflected a balance of P22,750.
Unreplenished expenses totaled P37,250 of which P9,510 pertains to January 2018.
You were furnished a copy of the company’s
follows:
Balance per bank P277,994
Add: Deposit in transit 248,836
Bank debit memos 712,750
Returned check 63,000
Less: Outstanding checks (174,580)
Book error (72,000)
Balance per books P1,056,000
Your review of the reconciliation statement disclosed the following:
1. Postdated checks totaling P107,400 were included as part of the deposit in transit. These
represent collections from various customers whose accounts have been outstanding for less
than three months. These checks were actually deposited on January 8, 2018.
2. Included in the deposit in transit is a check from a customer for P63,000 which was returned
by the bank on December 27, 2017 for insufficiency of funds. This account has been
outstanding for over six months. The check was replaced by the customer on January 15,
2018.
3. The bank debited the account of SAN MIGUEL CORP. for P710,000 as payment of notes
payable including interest of P10,000 due on December 26, 2017. This was not recorded as
of year-end.
4. A check was cleared by the bank as P30,900 but was recorded by the bookkeeper as
P102,900. This was in payment of accounts payable.
5. Bank service charges totaling P2,750 were not recorded.
1. Petty cash fund
A. P37,250 B. P60,000 C. P22,750 D. P32,260
2. Cash in bank
A. P522,650 B. P450,650 C. P1,056,000 D. P244,850
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