CASH AND CASH EQUIVALENTS QUIZZER #2

1. On December 1, 2011, Denmark Corp. established an imprest petty cash fund of P

9,000 by writing a check drawn against its general checking account. On December
30, the fund contained the following:
Currency and coins
Receipts for miscellaneous expenses
Receipts for office supplies
Envelope containing contributions of employees
Receipts for transportation

P 3,500
1,200
2,800
600
300

On December 31, the company wrote a check to replenish the fund. The amount of
replenishment is
2. China Corp. established a petty cash fund of P 5,000 for incidental expenses on June
1, 2011. At the end of the month, the count of cash on hand indicated that P 675
remained in the fund. A sorting of the petty cash vouchers disclosed the following
expenses had been incurred during the month:
Office supplies
Postage

P 342
1,780

Transportation
Miscellaneous

P 1,320
838

The above data indicate that there is

a. Cash shortage of P 45
b. Cash overage of P 45

c. Cash shortage of P 720

d. Cash overage of P 720

3. Japan Co. had the following balances at December 31, 2011:

Cash in checking account
Cash in money market account
Treasury bill, purchased 12/1/2011 maturing 2/28/2012
Treasury bill, purchased 3/1/2011 maturing 2/28/2012

P 350,000
250,000
800,000
500,000

Japan Companys policy is to treat as cash equivalents highly-liquid investments with

a maturity of three months or less when purchased.
The amount Japan Company should repost as cash and cash equivalents in its Dec.
31, 2011 balance sheet is
4. At December 31, 2011 Belgium Co. had the following balances in the accounts it
maintains in Citibank:
Checking account #139886
Checking account #139887
Money market account
90-day certificate of deposit, due February 28, 2012
180-day certificate of deposit, due March 15, 2012

P 175,000
(10,000)
25,000
50,000
80,000

The amount to be reported as Cash and Cash Equivalents on Belgiums Dec. 31,
2011 balance sheet is
5. Following were the account balances of Potter Co. at December 31, 2011:
Cash on hand
Cash in current and savings accounts
Cash set aside for plant expansion (expected for payment in 2012)

P 187,500
3,375,000
2,400,000

Cash in current and savings accounts include P 900,000 as holdout against shortterm loan arrangements. There are no legal restrictions as to withdrawal by Potter on
these holdouts.
Cash reported in Potters December 31, 2011 balance sheet at:
6. The balance sheet of Alaska Co. as of December 31, 2011 shows Cash of P 17,500.
It was found to include the following items:
Postal money orders from customers
Notes receivable in the possession of a collection agency
Receipts for expense advances for the account of credit suppliers
Customers postdated checks, returned by the bank marked NSF
Travelers checks
Currencies and coins on hand
Check in payment of accounts, still in the cashiers safe, not yet
delivered to payee
Petty cash fund (P 160 in currency and P 840 in expense receipts)

P 2,400
3,200
600
1,800
500
600
6,000
1,000

The correct cash balance is

7. Europe Corp. provided the following information:
Reconciled balance in Export Bank checking account
Reconciled balance in Citibank checking account
Balance in Equitable PCI bank savings account
90-day Certificate of deposit
Petty cash fund
Postage stamps
Employees IOU
Employees travel advances
Cash on hand (undeposited sales receipts)
Travelers checks

P 196,075
(4,000)
287,500
30,000
5,000
1,000
1,250
16,400
31,000
6,000

The amount to be reported as cash on Europes balance sheet is

8. Russ Corp. had the following items on December 31, 2011:
NSF checks
Savings account
Postage stamps
Postdated checks
IOUs

P 2,000
75,000
600
5,400
1,200

Cash on hand
Cash in sinking fund
Travel advances
Bank draft
Travelers checks

The total amount included in Cash balance at December 31, 2011 is

P 3,000
50,000
4,000
10,000
8,000

9. Turkey Co.s checkbook balance on December 31, 2011, was P 5,000. In addition,
Turkey held the following items in its safe on that date:
Check payable to Turkey Co., dated January 2, 2012, in payment of a
sale made in December 2011, not included in December 31
checkbook balance
Check payable to Turkey Co., deposited December 15 and included un
December 31 checkbook balance, but returned by bank in
December 30 stamped NSF. The check was redeposited on
January 2, 2012, and cleared on January 9
Check drawn on Turkey Co.s account, payable to a vendor, dated and
recorded in Turkeys books on December 31 but not mailed until
January 10, 2012

P 2,000

500

300

The proper amount to be shown as Cash on Turkeys balance sheet at December 31,
2011 is
10. The cash account of Atlanta Corp. has a balance of P 96,000 on December 31, 2011.
Your review of the cash transactions recorded in December revealed the following
Cash receipts included customers checks for P 4,000 dated January 10,
2012.
Check of P 10,000 payable to Bayou Co. The check dated 12/23 was
delivered to Bayou on 12/24 had not been paid by the bank as of 12/31
Check of P 7,000 payable to York Co. The check was dated 12/29 but still
undelivered as of 12/31
The correct cash balance at December 31, 2011 is
11. The unaudited balance sheet of Hawk Corp. at December 31, 2911 reported in the
current asset section Cash of P 254,000. A review of the cash transactions disclosed
the following:
Cash includes P 80,000 set aside for the purchase of new equipment.
Checks totaling P 6,000 payable to suppliers were mailed and recorded on
December 30, 2011 but these checks cleared the bank in January 2012.
Cash includes P 3,000 check received from a customer on December 29,
2011. The check is dated January 3, 2012.
The correct cash balance at December 31, 2011 is
12. Regency Corp. had the following transactions in its first year of operations:
Sales (90% collected in first year)
Bad debt written-off
Disbursements for cost and expenses
Disbursements for income taxes
Purchases of fixed assets
Depreciation of fixed assets
Proceeds from issuance of ordinary share
Proceeds from short-term borrowings
Payments on short-term borrowings
What is the cash balance at December 31 of the first year?

P 2,000,000
60,000
1,300,000
90,000
450,000
90,000
600,000
100,000
80,000