CASH AND CASH EQUIVALENTS – FINANCIAL ACCOUNTING AND REPORTING

1. In determining the amount to be reported on its December 31, 2016 balance sheet
as cash and cash equivalents, the following items were identified;
• Undeposited receipts (currency and coins on hand), P50,000
• Postal money orders, P90,000
• Traveler’s check on hand P120,000
• Money market fund held at Iron Bank that permits Bravos Company to write
checks on this fund, P400,000
• Utility deposit receipts (made to Bravos Company), P100,000.
The amount reported by Bravos Company under Cash and Cash Equivalents is

2. In determining the amount to be reported on its December 31, 2016 balance sheet
as cash and cash equivalents, the following items were identified;
• Lannister Bank demand deposit account, P200,000.
• Travel advances of P150,000 for executive officer’s travel for the first
quarter of next year
• Petty Cash fund (includes P5,000 in expense receipts) P25,000
• Stark cash fund in the amount of P200,000 is restricted for the acquisition
of machinery to be made in 2017
The amount to be reported by Highgarden Company under Cash and Cash Equivalent
is

3. In determining the amount to be reported on its December 31, 2016 balance sheet
as cash and cash equivalents, the following items were identified;
• Correct cash balance in Essos Bank, restricted for payroll purposes,
P500,000
• Special account in Westeros Bank used as bond sinking fund, P250,000
• Treasury warrants, P100,000
• Check from a customer on hand dated January 02, 2017; P90,000
• Check to suppliers on hand dated December 29, 2016; P60,000.
The amount reported by Valyria Inc under cash and cash equivalents is

4. In determining the amount to be reported on its December 31, 2016 balance sheet
as cash and cash equivalents, the following items were identified;
• Greyjoy current account, per ledger balance, company’s check of P90,000 are
outstanding as of December 31, 2016
• Frey current account, as per bank statement, company’s check of P120,000
are outstanding as of December 31, 2016
The amount to be reported by Arryn Company under cash and cash equivalent is

5. In determining the amount to be reported on its December 31, 2016 balance sheet
as cash and cash equivalents, the following items were identified;
• Tyrell checking account, includes a P500,000 compensating balance
maintained in relation to an existing short-term loan which is not
restricted as to withdrawal – P900,000
• Tully checking account, includes a P100,000 compensating balance maintained
in relation to an existing long-term loan which is legally restricted as
to withdrawal – P1,000,000
• Bank of Baratheon checking account, in which the company is required to
maintain a minimum average balance of P120,000 at all times to ensure future
credit availability.
The amount reported by Bolton Company under cash and cash equivalents is

6. Targaryen Company has the following investments of excess cash as of December

31, 2016.
• 3-month treasury bill, P200,000
• 6-month treasury bill, maturing on February 28, 2017, P300,000

Source: CRC – ACE Review School

1|Page
CASH AND CASH EQUIVALENTS – FINANCIAL ACCOUNTING AND REPORTING

• 1-year treasury bill, acquired on December 15, 2016, maturing on February

28, 2017, P400,000
• 90-day money market placement, P200,000
• 30-day certificate of time deposit, P240,000
• 180-day certificate of time deposit, P180,000
The amount may be included by Targaryen Company as cash and cash equivalents
in its December 31, 2016 statement of Financial Position is

7. Wildlings Company has the following investments of excess cash as of December

31, 2016
• 8% one-year term bonds, issue February 1, 2016 acquired on October 1, 2016,
P400,000
• 9%, one-year term bonds, issue date March 1, 2016 acquired on December 1,
2016, P350,000
• 100,000 ordinary shares acquired December 20, 2016, P300,000
• 5,000, 8% P50 par value redeemable preferred shares acquired on November
1, 2016. The redemption date will be on April 1, 2017.
The amount may be included by Wildlings Company as cash and cash equivalents
on its December 31, 2016 balance sheet is

8. In determining the amount to be reported on its December 31, 2016 balance sheet
as cash and cash equivalents, the following items were identified;
• Stark Bank
CA 000-T722W-000111000 4,660,000
CA 000-T722W-000112000 (220,000)
• Lannister Bank (70,000)
The amount reported by Varys Company under cash and cash equivalent is

9. In determining the amount to be reported on its December 31, 2016 balance sheet
as cash and cash equivalents, the following items were identified;
• Bolton Bank, opened in December 17, 2016 $10,000
• Greyjoy Bank, opened in December 23, 2016 $20,000
• Frey Bank a closed bank 100,000
The dollar account in Bolton Bank is currently restricted as to withdrawal
pending a congressional inquiry.
The exchange rates for specific dates are as follows: December 17, P45; December
23, P48; December 31, P50; January 8, 2017 (date of the financial statements
was prepared)
The amount reported by Arryn under cash and cash equivalent is

10. Jaime Company decided to establish a petty cash fund to help to ensure internal
control over its small cash expenditures. The following information is available
for the month of December
• On December 1, it established a petty cash fund in the amount of P3,000
• A summary of petty cash expenditure as of December 19 is as follows:
Freight in Charges P1,000
Supplies purchase and used 500
Postage Expenses 250
IOU from employees 150
Miscellaneous Expenses 300
• The petty cash fund was replenished on December 20. The balance based on a
count was P600.
• A summary of petty cash expenditures as of December 20 is as follows:
Freight in Charges P1,000
Supplies purchase and used 500
Postage Expenses 250
IOU from employees 150

Source: CRC – ACE Review School

2|Page
CASH AND CASH EQUIVALENTS – FINANCIAL ACCOUNTING AND REPORTING

Miscellaneous Expenses 300

Prepare the journal entries to record the transactions related to the petty cash
fund under the following methods
Imprest System Fluctuating System

11. On December 31, 2016, Brienne Company established an impress petty cash fund
of P10,000 by worrying a check drawn against its general checking account. On
December 31, the fund contained the following:
• Currency and Coins P3,500
• Receipts for miscellaneous expenses 2,200
• Receipts for office supplies 2,300
• Envelope containing contributions from employee 1,200
• Receipts for transportation 500
On December 31, Brienne Company wrote a check to replenish the fund. The amount
of replenishment check is

12. Cersei Company established a petty cash fund of P5,000 for incidental expenses
on June 1, 2016. At the end of the month, the count of cash on hand indicated
that P575 remained in the fund. A sorting of the petty cash vouchers disclosed
the following expenses had been incurred during the month:
• Office supplies P380
• Postage 1,680
• Transportation 1,360
• Miscellaneous 770
The amount of cash shortage (overage) is

13. The following is shown in the accounting record of Arya Company:

December 31 January 1
Cash ? P185,000
Accounts Receivable 250,000 320,000
Merchandise Inventory 285,000 215,000
Accounts Payable 160,000 120,000
Total sales and cost of goods sold for the year were P1,900,000 and P1,350,000
respectively. All sales and purchases were made on credit. Various operating
expenses P270,000 were paid in cash. There were no other pertinent
transactions affecting the cash balance.
The cash balance on December 31, 2016 of Arya Company is

14. Sansa Incorporated reported a cash and cash equivalent balance of P5,000,000
in the initial draft of its 2016 financial statements. An analysis of the
comparison revealed the following items:
• The cash on hand account included receipts totalling to P450,000 in which
represents collections from January 2 to 8 of 2017.
• The balance was net of an overdraft in its BDO account of P200,000. Sansa
Incorporated does not have any other account with BDO other than this
checking account
• Sansa Incorporated has an existing loan arrangement with RCBC. The loan
agreement includes a stipulation that Sansa Incorporated maintain a
compensating balance of P500,000 in its account which was restricted as to
withdrawal

Source: CRC – ACE Review School

3|Page
CASH AND CASH EQUIVALENTS – FINANCIAL ACCOUNTING AND REPORTING

• Included in the balance were two investments in treasury bonds, both of

which are maturing on February 1, 2017: P500,000 was acquired on May 15,
2016, while P700,000 was acquired November 30, 2016.
• The balance included in the Philippine peso equivalent of Sansa Incorporated
dollar account having balance of $30,000. The rate used to translate it was
P45, the exchange rate at January 8, 2017 when the schedule was prepared.
The exchange rate at December 31, 2016 was P49.50.
The correct cash and cash equivalent amount reported at December 31, 2016 is

15. On December 31, 2016, Robb Company’s cash and cash equivalents account balance
were composed of the following items:
Cash on Hand P200,000
Petty Cash Fund 30,000
HSBC Current Account 1,000,000
BPI Current Account 850,000
SBC, Current Account (90,000)
PNB, 60-day time deposit 150,000
The examination of the above-mentioned items revealed the following:
• The cash on hand accounts includes a customer’s check of P300,000 dated
January 02, 2017 and a P25,000 postal money order
• The petty cash fund includes unreplenished voucher for P10,000 and employee
check for P8,000 dated January 15, 2017 and a P5,000 company check bearing
the name of the petty cash custodian
• Included among the checks drawn by Omar Company against its HSBC current
account and recorded in December 2016 are:
Check No.1001208001 written and dated December 23, 2016 which was
delivered to the payee on January 6, 2017, P120,000
Check No.1001205001 written December 28, 2016 and dated January 12, 2017
which was handed to the payee on December 29, 2016, P190,000
• The BPI current was composed of the following items:
Current Account No. 2908356 P1,000,000
Current Account No. 2908357 (150,000)
• The PNB time deposit was set aside for the acquisition of a manufacturing
equipment to be purchased by the end of March 2017.
The amount to be reported as Cash and Cash Equivalent at December 31, 2016 is

Source: CRC – ACE Review School

4|Page