Accounting Disbursement and Related Transactions Problem 1 - (Cash Advance) The following are the transaction of Agency A for the year. Agency A was granted cash advances for payroll amounting to P320,000. Agency A paid salaries and other allowances: Salaries P 350,000 PERA(Personnel Economic Relief Allowance) 60,000 Total P 410,000 Less: Salary deductions Withholding tax P60,000 Life and Retirement 20,000 Pag-ibig 4,000 PhilHealth 6,000 90,000 Net Amount P320,000 Required: 1. Prepare the entry to record the cash advances for payroll. 2. Prepare the entry to record the paid salaries and other allowances: 3. Prepare the entry to record the remittance of withholding tax (with tax remittance advice). 4. Prepare the entry to record the remittance of other salary educations. Answers: 1. Advances for Payroll 320 000 Cash- Modified Disbursement System (MDS), Regular To record the grant of cash advance 2. NO ENTRY. Disbursement is recorded in the ORS and RAOD 3. Cash – Tax Remittance Advice 60 000 Subsidy from National Government 60 000 To record the constructive receipt of NCA for TRA 320 000 Due to BIR 60 000 Cash – Tax Remittance Advice 60 000 To record the constructive remittances of taxes withheld to the BIR though TRA 4. Due to GSIS 20 000 Due to PAG-IBIG 4 000 Due to PhilHealth 6 000 Cash-Modified Disbursement System (MDS), Regular 30 000 To record remittance to GSIS, PAG-IBIG and PhilHealth Problem 2 - Establishment of Petty Cash fund Agency B establish a petty cash fund for maintenance and other operating (MOOE) amounting to P15,000 Agency B received a request for replenishment of petty cash fund the following expenses: Office Supplies Transportation fares Repair of aircon LBC mail P1,000 200 400 320 P1,920 Required: 1. Prepare the entry in establishing a petty cash fund. 2. Prepare the entry in receiving the request for replenishment of petty cash fund. 3. Prepare the entry to record the replenishment of the petty cash fund. Answers: 1. Petty Cash Fund 15 000 Cash-Modified Disbursement System (MDS), Regular To record the establishment of petty cash fund 15 000 2. NO ENTRY 3. Office supplies expense 1 000 Transportation expense 200 Repairs and Maintenance 400 Other maintenance an operating expenses 320 Cash-Modified Disbursement System (MDS), Regular To record the replenishment of petty cash fund 1 920 Problem 3 - ( Traveling Expenses) Agency C grants cash advance to Mr. Traveler for traveling expense amount to P14,000 Mr. Traveler presented certificates of appearance for the travel completed along with the necessary documents to support the travel expenses P10,000; Mr. Traveler refunded the agency for the excess: Required: 1. Prepare the entry for cash advance 2. Prepare the entry for liquidation of cash advance Answers: 1. Advances to Officers and Employees 14 000 Cash- Modified Disbursement System (MDS), Regular To record the grant of cash advance 14 000 2. Traveling Expenses 10 000 Advances to Officers and Employees 10 000 To record the liquidation of cash advance for travel Cash – Collecting Officers 4 000 Advances to Officers and Employees 4 000 To record the refund of excess cash advance for travel Cash – Treasury/Agency Deposit, Regular 4 000 Cash – Collecting Officers To record the remittance of collection to BTr 4 000