In connection with your audit of the financial statements of ONOR Company for the year ended

December 31,2018, you gathered the following information:

A. The company maintains its current account with Tsunami Bank. The bank

statement on December 31, 2018, showed a balance of P638,340.

Your audit of the company's account with Tsunami Bank disclosed the following:

A check of P22,500 received from a customer whose account is current had been

deposited and then returned by the bank on December 28, 2018. No entry was

made for the return of this check. The customer replaced the check on January

15, 2019.

A check for P5,720 was cleared by the bank as P7,520. The bank made the

correction on January 2, 2019.

A check for P3,500 representing payment of an employee advance was received

and deposited on December 27, 2018 but was not recorded until January 3,

2019.

Postdated checks totaling P67,300 were included in the deposits in transit. These

represent collections of current accounts receivable from customers. The checks

were actually deposited on January 5, 2019.

Various debit memos for drafts purchased for payment of importation of

equipment totaling P230,000 were not yet recorded. These purchases were

previously set up as accounts payable. Said equipment arrived in December

2018.

Interest earned on the bank balance for the 4th quarter of 2018, amounting to

1,950 was not recorded

Bank service charges totaling P1,260 were not recorded

Deposit in transit and outstanding checks at December 31, 2018 totaled

P136,250 and P276,380, respectively.

B. Various expenses from the company's petty cash fund dated December 2018,

totaled P16,250, while those dated January 2019, amounted to P5,903. Another

disbursement from the fund dated December 2018 was a cash advance to an

employee amounting to P3,500. A replenishment of the petty cash fund was

made on January 8, 2019.

C. The company's trial balance on December 31, 2018, includes the following

accounts:

Cash in bank - Tsunami Bank P748,320

Cash in bank - Earthquake Bank 700,000

(restricted account for plant expansion, expected to be disbursed in 2019)

Petty Cash Fund 30,000

Time deposit, 1,000,000

Placed December 20,2018 and due March 20,2019

Money Market Placement - Prudential Bank 4,000,000

1. What is the adjusted petty cash balance on December 2018? (3 pts)

a. P3,437

b. P10,250

c. P30,000

d. P24,097

2. The petty cash shortage on December 31, 2018, is? (2pts)

a. 0

b. P5,903

c. P3,500

d. P4,347

3. What is the adjusted Cash in-bank Tsunami Bank balance on December 31, 2018?

(3 pts)

a. P500,010

b. P748,320

c. P432,710

d. P429,110

4. The entry to adjust the Cash in bank - Tsunami Bank account should include a debit to?

(2pts)

a. Accounts receivable for P89,800

b. Accounts receivable for P86,300

c. Accounts payable for P228,200

d. Interest expense for P1,950

5. The December 31, 2018, statement of financial position should show "Cash and Cash

equivalents" at?

a. P6,142,960

b. P5,439,360

c. P4,442,960

d. P5,442,960