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