B vouchers not yet replenished 1 vouch supporting

official.
b. Vouchers not yet replenished
1. Vouch supporting documents, invoices, etc.
2. Examine vouchers as to approval by authorized officials, signature of
payee, etc.
c. NSF checks
1. Determine reason why NSF checks are still on hand.
2. Confirm directly with drawers.
d. Return of excess travel advance
1. Examine liquidation of travel advance as reported and determine
accuracy of the amount returned.
2. Vouch supporting invoices.
e. Sale of money orders
1. Examine latest report of the Pampanga Co. to establish proper
accountability.
2. Confirm directly with the Pampanga Co. all unreported money orders
sold as well as unissued as of November 10.

Substantive Tests of Cash
9-7
f. Vouchers subsequently presented
1. Examine vouchers as to date, approval, amount and nature of
expenditures.
2. Confirm directly with employees those items representing wage
advance.
g. Book balance of the Petty Cash Fund.
1. Trace to the general ledger the balance of the fund.
9-8.
Requirement (1)
Bank Reconciliation, June 30
Bank Books
Balances, June 1 ........................................... P18,000 P30,170 (derived)
Additions:
Deposits in transit ................................. 16,000
Note and interest collected ................... 1,860
Recording error (944 – 854) ................ 90
Deductions:
Outstanding checks ............................... (6,000)
NSF check ............................................ (4,000)
Service charge ....................................... (120 )
Correct cash balance .................................... P28,000 P28,000
Requirement (2) Adjusting entry
Accounts receivable ..................................... 4,000
Service charge expense ................................ 120
Accounts payable .................................. 90
Interest revenue .................................... 60
Notes receivable ................................... 1,800
Cash ...................................................... 2,170
9-9. Form Company
Requirement (a)
Form Company
Bank Reconciliation Statement
6.30.15
Balance per bank statement P 27,000
Add: Cash on hand 9,228
Total 36,228
Less: Outstanding checks
Check no. 192 P 1,040

9-8
Solutions Manual to Accompany Applied Auditing, 2014 Edition
193 720
194 816
195 692 3,268
Balance as adjusted P 32,960
Balance per books P 34,700
Add: Note collected by bank 500
Total 35,200
Less: Shortage 2,240
Balance as adjusted P 32,960
Requirement (b) Shortage is P2,240 .
Requirement (c)
The cashier attempted to conceal the shortage by:
(1) Understating the outstanding checks
(a) Excluding check #192 P1,040
(b) Underfooting list of outstanding checks 200
(2) Adding instead of deducting note collected by bank
thereby covering up 1,000
Total P2,240
Requirement (d)
Suggestions to improve internal control:
(1) Bank reconciliation statement should be prepared by someone other
than the cashier.
(2) Collections should be deposited intact.
9-10. Jonas Company
Analysis of the bank statement and cash account will reveal the following:
a. Deposit in-transit, June 30: ....................................... P2,700
b. Checks outstanding:
# 62 ........................................................................... P 900
# 68 ........................................................................... 1,300 P2,200
c. Interest earned on bank balance ................................ P 100
Bank Reconciliation, June 30
Bank Book

Substantive Tests of Cash
9-9
Ending June balance ............. P22,580 Ending June balance ............. P22,980
Deposits in-transit ................. 2,700 Interest earned ....................... 100
Checks outstanding:
#62 ................................. (900)
#68 ................................. (1,300 )
Correct cash balance .............
P23,08 P23,08
The following journal entry must be made by Jonas Company:
Cash .................................................................................. 100
Interest revenue ................................................. 100
9-11. Apple Company
Requirement (1)
(a) Deposits in-transit – All deposits (#51 through #56) except #56 have
been recorded by the bank; therefore, the deposit in-transit is: #56 ,
P3,500 . This amount can be verified as: P2,000 + P190,000 – P188,500
= P3,500 .
(b) Checks outstanding: Inspection of the check numbers reveals that the
following are outstanding: #121, P1,000; #177, P2,500; #178, P3,000; and
#179, P1,500; total, P8,000 . This amount can be verified as: P6,000 +
P198,000 – P196,000 = P8,000 .
Requirement (2)
Bank Books