Exercises

AUD-Cash

You obtained the following information in connection with the audit of Bonsoir Company cash account as of
December 31, 20x1:

Outstanding checks, 11/30/20x1 P 16,250

Outstanding checks, 12/31/20x1 12,500
Deposit in transit, 11/30/20x1 12,500
Cash balance per general ledger, 12/31/20x1 37,500
Actual company collections from its customers during
December 152,500
Company checks paid by bank in December 130,000
Bank service charges recorded on the company books
in December 2,500
Bank service charges per December bank statement 3,250
Deposits credited by bank during December 145,000
November bank service charges recorded on company
books in December 1,500

The cash receipts book of December is underfooted by P 2,500.

The bank erroneously charged the company's account for a P3,750 check of another depositor. This bank error was
corrected in January 20x2.

Questions:
1. How much is the deposit in transit on December 31, 20x1?
2. What is the total unrecorded bank service charges as of December 31, 20x1?
3. What is the total book receipts in December?
4. What is the total amount of company checks issued in December?
5. What is the total book disbursements in December?
6. What is the book balance on November 30, 20x1?
7. What is the bank balance on November 30, 20x1?
8. What is the total bank receipts in December?
9. What is the total bank disbursements in December?
10. What is the bank balance on December 31, 20x1?

AUD 2
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:
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?

AUD- Inventory
You are engaged in the regular annual examination of the accounts and records of PRTC Manufacturing Co. for the
year ended December 31, 2012. To reduce the workload at year end, the company, upon your recommendation,
took its annual physical inventory on November 30, 2012. You observed the taking of the inventory and made tests
of the inventory count and the inventory records.

The company’s inventory account, which includes raw materials and work-in-process is on perpetual basis.
Inventories are valued at cost, first-in, first-out method. There is no finished goods inventory.

The company’s physical inventory revealed that the book inventory of P1,695,960 was understated by P84,000. To
avoid delay in completing its monthly financial statements, the company decided not to adjust the book inventory
until year-end except for obsolete inventory items.

Your examination disclosed the following information regarding the November 30 inventory: a. Pricing tests
showed that the physical inventory was overstated by P61,600.

b. An understatement of the physical inventory by P4,200 due to errors in footings and extensions.

c. Direct labor included in the inventory amounted to P280,000. Overhead was included at the rate of 200% of
direct labor. You have ascertained that the amount of direct labor was correct and that the overhead rate was proper.

d. The physical inventory included obsolete materials with a total cost of P7,000. During December, the obsolete
materials were written off by a charge to cost of sales.

Your audit also disclosed the following information about the December 31 inventory:

a. Total debits to the following accounts during December were: Cost of sales P1,920,800 Direct labor 338,800
Purchases 691,600

b. The cost of sales of P1,920,800 included direct labor of P386,400.

QUESTIONS:
Based on the above and the result of your audit, determine the following:
1. Adjusted amount of physical inventory at November 30, 2012
a. P1,715,560 b. P1,845,760 c. P1,631,560 d. P1,722,560

2. Adjusted amount of inventory at December 31, 2012

a. P1,509,760 b. P1,502,760 c. P1,516,760 d. P1,425,760

3. Cost of materials on hand, and materials included in work in process as of December 31, 2012
a. P819,560 b. P728,560 c. P812,560 d. P942,760

4. The amount of direct labor included in work in process as of December 31, 2012
a. P618,800 b. P338,800 c. P232,400 d. P386,400

5. The amount of factory overhead included in work in process as of December 31, 2012
a. P 772,800 b.P464,800 c. P1,237,600 d. P777,600