Professional Documents
Culture Documents
CHAPTER 2
CASH AND CASH EQUIVALENTS
2-1.
(Money Company)
PROBLEMS
P105,200
30,800
1,250
4,200
65,000
14,000
23,120
P243,570
Alternative computation:
Reported total
Less Sinking fund cash
Short term treasury bills
Unreplenished petty cash expenses
Correct cash balance
P330,820
( 35,000)
( 52,000)
(
250)
P243,570
The outstanding checks of P15,200 was ignored since the given balance of cash is a cash balance
per books. Short-term treasury bills of P52,000 is reported as part of trading securities unless
there is an indication of a maturity of three months or less in which case, they are included as
part of cash and cash equivalents. Meanwhile, sinking fund cash of P35,000 is reported as a
noncurrent financial asset.
2-2.
(Cotton Company)
Reported checkbook balance
Adjustments:
Customers post dated check included in the balance
Customers check returned by bank marked DAIF
Company check recorded but not yet mailed
Cash reported on December 31, 2013 statement of financial position
2-3.
(Grain Company)
Balance per general ledger
Non-cash items:
Customers NSF checks
IOUs
Postage stamps
Cash in sinking fund
Customers post dated checks
Travel advances
Correct cash balance
P180,000
( 65,000)
( 20,000)
15,000
P110,000
P2,205,600
P 20,000
1,200
600
500,000
5,400
4,000
531,200
P1,674,400
NSF checks, IOUs and customers post dated checks are reported as receivables while postage
stamps and travel advances are prepaid expenses. Meanwhile, cash in sinking fund is reported
as a noncurrent financial asset.
2-4.
(Rod Company)
Petty cash (10,000 1,250)
Cash on hand (625,000 2,500)
Cash in bank- General (750,000 + 12,500)
Cash in bank, Payroll (320,000 + 10,000)
Total
8,750
622,500
762,500
330,000
P1,723,750
IOU from an employee and customers post dated check are receivable items; the bank overdraft
in another bank is reported as a current liability (offset can be made only if the accounts are with
the same bank); the savings deposit is a non-current item since it is intended for a non-current
purpose (for plant expansion).
2-5.
(Latte Company)
Cash and cash equivalents:
Savings account with Allied Bank
Per books
Customers postdated check
Checking account with Allied Bank
Per books
Issued postdated check
Bills and coins in the petty cash fund
Money market fund which allows check writing
Certificate of deposit with term of 90 days
Payroll fund with BDO
Per books
Unissued but recorded check
Cash balance with BPI
Correct cash and cash equivalents
P 900,000
(320,000)
P1,400,000
300,000
P6,000,000
50,000
P580,000
1,700,000
9,850
2,000,000
1,000,000
6,050,000
5,000,000
P16,339,850
The items not included in cash and cash equivalents shall be presented as follows:
Expenses in the statement of comprehensive income (P150
cash shortage in petty cash fund + expense receipts of P5,000) P
5,150
Current assets:
Certificates of deposit (with term of 120 days)
2,000,000
Accounts receivable (customers postdated check)
320,000
Non-current assets:
Cash fund for retirement of bonds payable
1,500,000
Current liabilities
Accounts payable (PDC issued to supplier)
300,000
Salaries payable (unissued check to employee)
50,000
2-6.
(Jessie Company)
Nov. 20
Nov. 20 to
Dec. 15
No entry
Dec. 16
Transportation expense
Representation expense
5,000
1,500
1,200
5,000
Dec. 31
Transportation expense
Supplies expense
Petty cash fund
340
1,400
1,740
1,740
340
1,400
Jan. 1-8
No entry
Jan. 9
460
2,700
1,800
3,000
4,960
3,000
(Coral Company)
(a)
(b)
2-8.
4,920
Dec. 16 31
Jan. 1
2-7.
1,300
920
P 670.40
P 341,60
780.00
1,000.00
1,321.40
837.60
4,280.60
P
4,951.00
49.00
341.60
780.00
1,000.00
1,321.40
837.60
49.00
4,329.60
(Prada Company)
1.
May 2 Petty cash fund
Cash in bank
2.
3.
4.
P5,000.00
8,000
8,000
May 2-20
No entry
No entry
May 20 Freight-in
Freight-out
Supplies expense
2,500
3,000
800
5.
6.
Cash in bank
No entry
May 31 Freight in
Transportation expense
Employee benefit expense
Advances to employees (IOU of 500 + short of 130)
Petty cash fund (8,000 5,700)
Per count
Bills and coins
Paid petty cash vouchers
(1,200 + 150 + 320 + 500)
Total
Petty cash fund, imprest balance
Cash shortage
2-9.
2-10.
6,300
1,200
150
320
630
2,300
P5,700
2,170
P7,870
8,000
P 130
(Canon Company)
(a)
(b)
Per count
Bills and coins
PCVs dated June
PCVs dated July
IOUs
PDC drawn by Juvy Victoria
Total
Petty cash fund, per ledger
Cash shortage
(c)
Miscellaneous expenses
Receivable from employees (IOU + PDC)
Cash short/over
Petty cash fund
2,450
800
3,250
P 2,450
3,300
800
1,400
2,000
P 9,950
10,000
P
50
3,300
3,400
50
6,750
(Giordano Corporation)
Giordano Corporation
Bank Reconciliation
December 31, 2013
Balance per bank statement
Add:
Cash on hand for undeposited receipts
P13,025
Deposit in transit
35,000
Total
Deduct: Outstanding checks
Adjusted balance
48,025
P252,950
204,055
P 43,895
P(32,560)
252,500
P219,940
P199,925
176,045
P 43,895
Adjusting entries:
Cash in bank
Notes Receivable
Interest Revenue
252,500
107,020
64,025
5,000
250,000
2,500
Miscellaneous Expenses
Petty Cash Fund
176,045
1,800
1,800
2-11.
(Pound Company)
(a)
Balances before adjustments
Bank service charge
Debit memo for printed checks
Outstanding checks
Deposit of July 31 not yet recorded by bank
Proceeds of a bank loan, net of P300 interest
Proceeds from customers note, including P100 interest
Check #1210 for P2,100 erroneously deducted by bank as P1,200
Stolen check lacking authorized signature deducted by bank in error
Customers NSF check returned by bank
Correct cash balance
P47,095
Per Bank
P31,948
(6,728)
4,880
(900)
800
_______
P30,000
234
760
300
12,806
Per Books
P17,194
( 109)
( 125)
5,700
8,100
(760)
P30,000
6,000
8,000
100
(Bench Company)
Per Bank
P892,346.30
(333,788.20)
53,172.00
( 225.00)
97,000.00
28,924.10
2-15.
(8,737.40)
10.00
26,900.00
50,000.00
( 100.00
(18,192.00)
P699,272.20
20,350.00
__________
P699,272.20
(Amethyst Corporation)
Balance per bank statement
Deposit in transit, April 30
Outstanding checks, April 30
Erroneous charge by bank
NSF checks not yet redeposited (3,435 1,835)
Proceeds of note collected by bank
Bank service charge
Unadjusted book balance for cash, April 30, 2013
2-14.
Per Books
P590,884.60
P169,263
18,200
( 59,435)
2,200
1,600
( 7,548)
180
P124,460
(Silver Company)
Balance per bank statement
Deposits in transit
Outstanding checks (67,500 9,000)
Erroneous credit by bank
Check of Silver Lining charged by bank to Silver Co.s account
Correct cash balance
Cash balance per books, March 1
Cash receipts during March
Cash disbursements during March
Bank service charge for March
Cash balance per books at March 31
Cash balance per bank statement
Deposit in transit
Outstanding checks
Cash balance reflected per bank
Suspected cash shortage (undeposited collections)
P380,750
52,000
(58,500)
( 4,000)
12,000
P382,250
P115,963.70
246,475.00
(334,709.10)
(92.00)
P 27,637.60
P15,341.40
9,000.00
(2,703.80)
21,637.60
P 6,000.00
(Pearl Corporation)
Balance per bank statement
Add receipts of 12/31/13 not yet deposited
Balance per bank statement before outstanding checks
Balance per books
P387,000
Bank service charge for December
( 1,000)
Paid check for P40,000 recorded as P4,000
( 36,000)
Customers check returned by bank marked DAIF
( 22,000)
Outstanding checks at December 31, 2013
P400,000
100,000
P500,000
328,000
P172,000
Proof:
Balance per bank Balance per books
Reported balances
P400,000
P387,000
Receipts not yet deposited
100,000
December bank service charge
(
1,000)
Paid check for P40,000 recorded as P4,000
( 36,000)
Customers check returned by bank
( 22,000)
Outstanding checks at December 31 (see above)
(172,000)
Correct cash balance
P328,000
P328,000
2-17.
2-18.
P294,771.00
P1,065,620.00
21,270.00
(21,270.00)
32,925.00
__________
P275,516.00
P270,311.00
(40,525.00)
P148,986.00
32,925.00
____________
P1,077,275.00
(35,191.50)
_____625.00
P147,344.50
P1,072,850.00
P1,195,536.50
P147,624.50
(295.00)
158.00
(158.00)
5,947.00
4,925.00
(5,947.00)
5,500.00
(5,500.00)
4,925.00
5,000.00
5,000.00
____________
P1,077,275.00
_____(900.00)
P1,205,446.50
(Bruins Company)
Bruins Company
Proof of Cash
Dec. 31
(40,525.00)
35,191.50
_____(625.00)
P1,205,446.50
(295.00)
__________
P275,516.00
December
Disbursement
s
P1,211,405.00
_____900.00
P147,344.50
(275,000)
125,000
(125,000)
670,000
(20,000)
P2,053,500
P5,776,500
P2,055,300
P5,567,000
17,000
(1,800)
188,000
P2,053,500
4,500
P5,776,500
April
Disbursements
P4,357,750
April 30
P3,097,250
(275,000)
580,000
(580,000)
670,000
(20,000)
(45,000)
P4,617,750
45,000
P3,212,250
P4,619,800
P3,002,500
17,000
(1,800)
2,450
(2,450)
(2,700)
188,000
2,700
P4,617,750
4,500
P3,212,250
(Lily Company)
a.
P275,000
35,000
(40,000)
(50,000)
P220,000
b.
P220,000
25,000
(60,000)
(10,000)
(35,000)
(1,500)
P138,500
c.
P150,000
220,000
(138,500)
P231,500
or
Unadjusted bank statement balance at August 31
(180,000 + 275,000 220,000)
P235,000
d.
(25,000)
35,000
35,000
1,500
(50,000)
P231,500
P235,000
( 25,000)
35,000
P245,000
2-21.
P231,500
( 35,000)
( 1,500)
50,000
P245,000
(Leo Company)
a.
6,400
349,000
( 344,000)
P 11,400
b.
P 40,000
320,000
( 350,000)
P 10,000
(VAB, Inc.)
Outstanding checks at April 30
Add cash disbursements per books:
Total credits in all journals during May
Less Service charge in April recorded in May
Total
Less checks cleared during May:
Checks and charges by bank in May
Less: May service charge
NSF check returned as a bank charge in May
Outstanding checks at May 31
49,500
2-22.
P 30,000
P90,000
( 1,000)
89,000
P119,000
P80,000
(
500)
(10,000)
P 4,500
23,880
(24,300)
P 4,080
Proof:
August Receipts
Per bank
Per books
10
69,500
P
2-24.
P30,600
(4,500)
6,300
4,080
P30,180
(Euro Company)
Petty Cash Fund
Currency and coins
Replenishment check
Cash on hand
Reported amount
Less: Customers NSF check returned
Customers post dated check
Cash in Metrobank
Reported amount
Add: Undelivered check #1214
Post dated check #1219
Cash in Allied Bank
General account
Less credit balance in Payroll account
Correct cash balance
(3,120)
P30,180
P37,855.00
P62,277.00
( 24,750.00)
( 9,218.00)
28,309.00
P66,164.00
P 9,500
30,500
(30,200)
P 9,800
P27,000
P 2,000
23,600
(24,000)
P 1,600
P 1,490
1,830
P 3,320
P 19,700
(5,000)
(1,500)
13,200
P110,200
2,500
4,300
117,000
P162,000
(4,000)
158,000
P291,520
Employee advances of P880 is reported as a receivable; unreplenished petty cash vouchers are
expenses; and currency in an enveloped marked collections for charity is a non-company fund.
Postal money orders of P1,800 is a proper inclusion to cash. The savings account deposit in
Security Bank is reported as a non-current asset since it is intended for a non-current purpose.
11
C
C
D
D
D
D
A
A
D
B
Problems
MC29
MC30
MC31
MC32
C
D
C
B
MC33
MC34
MC35
MC36
MC37
MC38
D
B
C
B
A
D
MC39
MC40
B
B
MC11
MC12
MC13
MC14
MC15
MC16
MC17
MC18
MC19
MC20
C
B
D
C
D
A
C
C
C
B
MC21
MC22
MC23
MC24
MC25
MC26
MC27
MC28
B
A
B
D
B
D
D
A
12
MC41
MC42
MC43
MC44
MC45
MC46
B
B
A
C
B
B
MC47
MC48
MC49
MC50
MC51
MC52
D
D
C
D
B
D
MC53
MC54
MC55
MC56
B
A
D
C
13