Problem 1 (Computation of Cash Shortage)
The PRIA COMPANY had weak internal controls over its cash transactions. Facts about its cash
position at
November 30, 20x4 were as follows:
The cash books showed a balance of P94,508, which included undeposited receipts. A credit of P500
on the bank's records did not appear on the books of the company. The balance per bank statement
was P77,750. Outstanding checks were no. 8420 for P581, no. 8422 for P750, no. 8430 for P1,266,
no. 8621 for P954, no. 8623 for P1,034, and no. 8632 for P726.
The cashier stole all undeposited receipts in excess of P18,972 and prepared the following reconciliation:
Balance per books, Nov. 30, 20x4 P94,508
Add: Outstanding checks
8621 P 954
8623 1,034
8632 726 2,214
96,722
Less: Undeposited receipts 18,972
Balance per bank, Nov. 30, 20x4 77,750
Less: Unrecorded credit 500
True cash, Nov. 30, 20x4 P77.250
What is the correct amount of cash that should be on hand for deposit on November 30, 20x4?
How much was stolen by the cashier?
The cashier attempted to conceal his theft by
I. Not listing all outstanding checks.
II. Underfooting outstanding checks shown on the reconciliation.
III. Adding an item to the bank balance that should be deducted from the book balance.
A. I and II only C. I and III only
B. II and III only D. I, II, and III
Taking only the information given, which of the following internal control deficiencies allowed the
cashier to steal cash and conceal his theft?
A. The cashier is also responsible for preparing the reconciliation.
B. No one other than the cashier is responsible for tracing cash receipts to the deposits in the bank.
C. Both A and B.
D. Neither A nor B.
What is the adjusted cash balance as of November 30, 20x3?
Problem 2 (Computation of Cash Receipts and Disbursements)
In connection with your audit of the cash account of PRIA CORP., you gathered the following information.
a. Balance per bank, December 1, 20x4 P145,000
b. Total bank receipts (credits) in December 346,000
c. Balance per bank, December 31, 20x4 114,500
d. Outstanding checks, Nov. 30, 20x4 (including
P12,000 paid by bank in December) 67,000
e. Outstanding checks, December 31, 20x4 (including
checks issued in November) 94,162
f.Deposit in transit, November 30, 20x4 39,458
g. A customer's check received on
December 4, 20x4, was returned by
bank on December 7 marked "NSF."
It was redeposited on December 8, 20x4. The only
entry made was to take up the collection on
December 4, 20x4. 11,143
What is the total book receipts in December?
What is the total bank disbursements in December?
What is the total book disbursements in December?
Problem 3 (Bank Reconciliation: Unadjusted to Adjusted Balances)
The following data were taken from PRIA's check register for the month of April. PRIA's bank
reconciliation for March showed one outstanding check, check No. 178 for P2,150 (written on March 20),
and one deposit in transit for P4,350 (made on March 31).
Date Item Checks Deposits Balance
20x4
April 1 Beginning Balance 6,150
1 Deposit 26,167 32,317
1 Check No. 179 250 32,567
4 Check No. 180 10,673 21,898
27 Deposit 11,774 33,672
29 Check No. 181 13,217 20,490
The following is from PRIA's bank statement for April:
Date Item Checks Deposits Balance
20x4
April 1 Beginning Balance 3.950
3 Check No. 179 250 3,700
3 Deposit 4,350 8,050
5 Check No. 180 10,673 (2,623)
5 Automatic loan 8,150 5,527
5 Deposit 26,417 31,944
20 NSF check 1,000 30,944
20 Service charge 600 30,344
30 Interest 82 30,426
Assume that any errors or discrepancies you find are PRIA’s, not the bank's.
What is the adjusted cash balance as of April 30?
Problem 4 (Count of Petty Cash Fund and Undeposited Collections)
In connection with your audit of the financial statements of PRIA CORP. for the year ended December 31,
20x4, you conducted a surprise count of the company's petty cash fund and undeposited collections at
8:20 A.M. on January 3, 20x5. Your count disclosed the following:
Bills and coins
Bills Coins
P100.00 5 pieces 5.00 18 pieces
50.00 40 pieces 1.00 206 pieces
20.00 48 pieces 0.25 32 pieces
Postage stamps (unused) - P365
Checks
Date Payee Maker Amount
Dec. 30 Cash Custodian P1,200
Dec. 30 PRIA Corp. SLV, Inc. 14,000
Dec. 31 PRIA Corp. Josart Tubay,
sales manager 1,680
Dec. 31 PRIA Corp. MSU Corp. 17,800
Dec. 31 PRIA Corp. Ateneo, Inc. 8,300
Dec. 31 Taiwan Corp. PRIA Corp. 27,000
Unreimbursed vouchers
Date Payee Description Amount
Dec. 23 Josart Tubay, Advance for trip to P20,000
sales manager Payatas City
28 Central Post Office Postage stamps 1,620
29 Messengers Transportation 150
29 Byte, Inc. Computer repair 800
Other items found inside the cash box:
1. Unclaimed pay envelope of Juan Dering. Indicated on the pay slip is his net salary of P7,500. Your
inquiry revealed that Juan's salary is mingled with the petty cash fund.
2. The sales manager's liquidation report for his Payatas City trip.
Cash advance received on Dec. 23 P20,000
Less: Hotel accommodation, meals, etc. P16,000
Bus fare for two 1,200
Cash given to Pablo, salesman 1,000 18.200
Balance P1.800
Accounted for as follows:
Cash returned by Pablo to the sales manager P120
Personal check of the sales manager 1,680
Total P1.800
Additional information:
1. The custodian is not authorized to cash checks.
2. The last official receipt included in the deposit on December 30 is No. 4351 and the last official
receipt issued for the current year is No. 4355. The following official receipts are all dated
December 31, 20x4.
OR No. Amount Form of Payment
4352 P13,600 Cash
4353 17,800 Check
4354 3,600 Cash
4355 8,300 Check
3. The petty cash balance per general ledger is P25,000. The last replenishment of the fund was
made on December 22, 20x4.
What is the amount of shortage due from the sales manager?
What is the amount of undeposited collections on December 31,20x4?
The adjusting entries on December 31,20x4 should include a net debit to Travel expenses of_________
The cash count should include total checks of______________
What is the total cash shortage?
