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Problem 2

The cashier of IMC Company had a cash count on September 30, 2020 that showed currency, coins, stamps and checks totaling ₱18,230 but the cashier's accountability was ₱18,470, resulting in a cash shortage of ₱240. An audit of Irene Corporation found a cash balance of ₱25,700 on hand and ₱131,640 in the bank, but a check of ₱9,260 was outstanding. Various financial records and calculations were examined to determine collections of ₱1,188,140, payments for purchases of ₱1,391,780, total cash disbursements of ₱2,810

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432 views

Problem 2

The cashier of IMC Company had a cash count on September 30, 2020 that showed currency, coins, stamps and checks totaling ₱18,230 but the cashier's accountability was ₱18,470, resulting in a cash shortage of ₱240. An audit of Irene Corporation found a cash balance of ₱25,700 on hand and ₱131,640 in the bank, but a check of ₱9,260 was outstanding. Various financial records and calculations were examined to determine collections of ₱1,188,140, payments for purchases of ₱1,391,780, total cash disbursements of ₱2,810

Uploaded by

Mitch Minglana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Problem 2

A count of the undeposited receipts under the custody of Irene, cashier of IMC Company, on September
30, 2020 showed the ff composition:
Currency and coins 12,310
Unused postage and documentary stamps 110
Checks:
Date Payee Drawer
3/24/2020 Cash Irene 1,000
9/20/20 IMC Surigao Corp 2,350
9/27/20 IMC Mae 1,960
9/30/20 Smart IMC 900
Cash advance voucher paid out of receipts 1,500
Total per count 20,130
Cashier’s accountability to be 18,470.
Compute: what was the amount of shortage/overage on Sept 30, 2020?
= Cash shortage of ₱ 240

Currency and Coins 12, 310


Unused Postage and documentary stamps 110
Checks payable to IMC Company:
9/20/20 IMC Surigao Corp 2,350
9/27/20 IMC Mae 1,960 4, 310
Cash advance voucher paid out of receipts 1, 500
Total per count 18, 230
Less: Cashier’s Accountability 18, 470
Cash Shortage (240)
Problem 3

Irene Corporation was organized on Jan 15, 2024 and started operation soon thereafter. The company
cashier who acted also as the bookkeeper had kept the accounting records very haphazardly. The
manager suspects of him of defalcation and engaged you to audit his account to find out the extent of
the fraud, if there is any. On November 15, when you started the examination of the accounts, you find
the cash on hand to be 25,700. From inquiry at the bank, it was ascertained that the balance of the
Company’s bank deposit in current account on the same due was 131,640. Verification revealed that the
check issued for 9,260 is not yet paid by the bank. The corporation sells at 40% above cost.

Your examination of the available records disclosed the ff information:

a. Share capital issued at par for cash 1,600,000


b. Real estate purchased and paid in full 1,000,000
c. Mortgage liability secured by real estate 400,000
d. Furniture and fixture (gross) brought on which
There is still balance unpaid of 30,000 145,000
e. Outstanding notes due to bank 160,000
f. Total amount owed to creditors on open account 231,420
g. Total sales 1,615,040
h. Total amount still due from customers 426,900
i. Inventory of merchandise on November 15 at cost 469,600
j. Operating expenses paid 303,780

Based on the above and result of your audit, compute the ff as of November 15, 2024

a. Collections from sales


= ₱ 1,188,140

Sales 1,615,040
Less: AR, 11/15 426,900
Collection from sales 1,188,140

b. Payments for purchases


= ₱ 1,391,780

Cost of Sales (1,615,040/1.4) 1,153,600


Add: Merchandise inventory, 11/15 469,600
Purchases 1,623,200
Less: AP, 11/15 231,420
Payments for Purchases 1,391,780
c. Total cash disbursements
= ₱ 2,810,560

Purchase of Real estate 1,000,000


Payment for furniture and fixtures (145k-30k) 115,000
Expenses paid 303,780
Payments for purchases (b.) 1,391,780
Total cash disbursements 2,810,560

d. Adjusted cash balance


= ₱ 148,080

Unadjusted bank balance 131,640


Add: Deposit in Transit 25,700
Less: Outstanding checks (9,260)
Adjusted Cash Balance 148,080

e. Cash shortage
= ₱ 389,500

Proceeds from issuance of common stock 1,600,000


Proceeds from mortgage payable 400,000
Proceeds from notes payable – bank 160,000
Collections from sales (a.) 1,188,140
Total cash receipts 3,348,140
Less: Cash disbursements (c.) 2,810,560
Unadjusted Cash balance 537,580

Adjusted Cash balance (d.) 148,080


Less: Unadjusted Cash balance 537,580
Cash Shortage (389,500)

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