Reference no: EM133085045
Question - Bridgerton Company, one of your audit clients, presented to your audit team it's trial balance at the end of the current year. A summary of the cash account is presented as follows:
Petty Cash P10,000
Cash in bank - UCPB (checking account) P263,000
Cash in Bank - BPI (saving account) P350,000
Cash in Bank - BDO (peso savings account #1) P100,000
Cash in Bank - BDO (dollar savings account #2) $1,000
The following information was gathered from your audit:
a. The petty cash fund reported on the books represents the imprest balance designated by the entity. Upon examination, you found that receipts and documents for miscellaneous general expenses amounting to P8,210 were unreplenished as of December 31, 2020. In addition, the actual currency (bills and coins) per count amounted to P1,500.
b. The bank statement for UCPB showed a balance of P350,000. This does not include deposit in transit P52,000 and outstanding checks of P150,000. The statement showed deposit of P62,000 (not yet recognized in the company's records) from one of the company's customers representing advance payment for services to be rendered in the future.
A check that cleared the bank amounting to P70,000 was recognized in the company's disbursement records at P7,000.
The bank statement also showed a disbursement of P10,000 which was related to a check issued by an unrelated entity.
c. The bank statement from BPI revealed a balance of P440,000. Upon inspection of the bank statement and the company records, there were various deposits acknowledged by the bank during the last month of the period totaling P30,000 from unknown parties which were still to be verified by the entity. It is the entity's practice to require online clients to make cash deposit slip for verification and proper application of payments Furthermore, there were still unaccounted deposits of P60,000 in the past months which were not yet reflected in the entity's records.
d. The BDO accounts are designated for donations and fund-raising activities related a building construction project. The closing rate for the year was $1 = P54 and the average rate was $1 = P40.
Determine the following as a result of your audit:
1. How much is the cash shortage or overage on the petty cash fund?
a. P380 overage
b. P290 shortage
c. P380 shortage
d. P290 overage
2. How much is the adjusted balance of cash in bank - UCPB checking account?
a. P252,000
b. P245,000
c. P235,000
d. P262,000
3. How much is the adjusted balance of cash in bank - BPI saving account?
a. P350,000
b. P430,000
c. P440,000
d. P450,000
4. How much is the combined balance of the BDO accounts (in peso)?
a. P100,000
b. P140,000
c. P154,000
d. P145,000
5. How much should be reported as cash in the statement of financial position?
a. P703,500
b. P702,000
c. P666,500
d. P811,500