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Cash and Cash Equivalents Module Answer Key
Cash and Cash Equivalents Module Answer Key
Problem1.1
Problem1.2
Problem1.3
Checkbook balance 3,750,000.00
Undelivered check drawn on Bebelinda's account 500,000.00
Adjusted cash balance 4,250,000.00
CL NCL
Check drawn on Bebelinda's account 500,000.00
Cash in Sinking fund 2,000,000.00
Total 500,000.00 2,000,000.00
Problem1.4
Cash cash and CCE CCE
Cash on Hand 356,000.00 356,000.00
Demand deposit 4,444,000.00 4,444,000.00
Certificate of deposit 2,000,000.00 2,000,000.00
Petty cash fund 55,000.00 55,000.00
Traveler's check 150,000.00 150,000.00
Manager's check 100,000.00 100,000.00
Money order 200,000.00 200,000.00
Total 5,305,000.00 7,305,000.00 2,000,000.00
Problem1.5
Cash CE
Cash-coin,currency, saving and checking 2,489,000.00
Government treasury bills 3,000,000.00
Commercial papers 1,117,000.00
Total 2,489,000.00 4,117,000.00
Problem1.6
Problem 1.7
Cash in bank 1,800,000.00
Less: compensating balance legally restricted (600,000.00)
Adjusted cash in bank 1,200,000.00
Time deposit 250,000.00
Petty cash fund 50,000.00
Total 1,500,000.00
Problem1.8
Problem1.9
Problem1.10
Problem1.11
Currencies 20,000.00
Coins 2,000.00
Check drawn to the order of the petty cash custodian 15,000.00
Total 37,000.00
Note:
Under PAS 7, treasury bill, money market placement and time deposit normally qualify as cash equivalents
400,000.00 only when they have a short maturity of three month or less from the date of acquisition.
800,000.00
3,850,000.00 Time deposit is not a cash and cash equivalent because the term is four months.
5,050,000.00
Note:
The cash in bank set aside for payroll is included in cash because it is for the payment of current liability.
4,500,000.00
1,000,000.00 The cash on hand is reduced by the postdated check payable to Babaloo. The post dated check should be re
578,000.00 to accounts receivable.
1,500,000.00
7,578,000.00
mally qualify as cash equivalents
Problem2.1
Problem2.2
Problem2.3
Problem2.4
Balance per bank 1,386,000.00
Deposit In Transit 315,000.00
Outstanding checks (590,000.00)
Erroneous bank credit (200,000.00)
Adjusted cash in bank 911,000.00
Problem2.5
Problem2.6
Problem2.7
COMPREHENSIVE PROBLEMS
Problem2.1
Book Bank
1) Unadjusted balances 85,000.00 130,350.00
Bank service charge (2,000.00)
Deposits in Transit 49,000.00
Outstanding Checks (17,650.00)
Collection of note 136,000.00
Erroneous bank deposit 54,600.00
Transposition error (2,700.00)
Adjusted Balances 216,300.00 216,300.00
Problem2.2
2) Book Bank
Unadjusted balances 541,714.00 585,284.00
Outstanding checks (52,810.00)
Undeposited collections 23,000.00
Error in recording rent check 900.00
Automatic mortgage payment (18,000.00)
Bank service charges (740.00)
Bank error-deposit incorreclty credited to Ian CO (35,000.00)
NSF check (3,400.00)
Adjusted balances 520,474.00 520,474.00
Problem2.3
Book Bank
Unadjusted balances 20,490.00 30,426.00
Outstanding checks
No,178 2,150.00
No.181 13,217.00 (15,367.00)
Deposit in Transit 11,774.00
Error in recording deposit 250.00
Automatic loan 8,150.00
Interest 82.00
NSF Check (1,000.00)
Bank Service charge (600.00)
Auritmetic Error for
No.179 (500.00)
No.180 (4.00)
No,181 (35.00)
Adjusted balances 26,833.00 26,833.00
Problem2.4
5) Book Bank
Unadjusted balances 275,132.00 273,620.00
Depsits in transit 49,000.00
Outstanding checks (46,938.00)
Service charge (1,000.00)
Interest 1,550.00
Adjusted balances 275,682.00 275,682.00
Problem2.5
1) Sales 6,235,200.00
Accounts Receivable (165,400.00)
Collections from customer 6,069,800.00
4) Land 1,000,000.00
Building 1,400,000.00
Furniture and fixtures 367,000.00
Operating expenses paid 605,150.00
Payment for purchases 4,043,990.00
Total cash disbursements per books 7,416,140.00
6) Book Bank
Unadjusted balances 803,660.00 892,000.00
Deposits in transit 384,660.00
Service charge (2,000.00)
Outstanding checks (475,000.00)
Adjusted balances 801,660.00 801,660.00
Problem2.6
1) Principla (SQUEEZE) 27,000.00
Interest 800.00
Collection fee (200.00)
Proceeds credited by bank 27,600.00
2) Book Bank
Unadjusted balances 35,000.00 60,000.00
Note collected by bank 27,600.00
Debit memo for check book (SQUEEZE) (100.00)
Deposit in transit 15,200.00
Transpposition error in recording deposit (9,000.00)
Erroneous bank debit 26,700.00
Petty cash fund (10,000.00)
Erroneous bank credit (11,000.00)
Outstanding checks, net of certified check (29,400.00)
Adjusted balances 52,500.00 52,500.00
Problem2.7
5) Book Bank
Unadjusted balances, April 30 78,250.00 304,000.00
Deposits in Transit 69,850.00
Outstanding checks (241,000.00)
Error in check no. 4115 27,000.00
EFT-rent 16,300.00
Bank collection 68,400.00
Unauthorized signature check (45,150.00)
EFT-insurance (10,950.00)
Service Charge (1,000.00)
Adjusted Balances 132,850.00 132,850.00
BASIC PROBLEMS
Problem3.1
Problem3.2
Problem3.3
1) Bank disbursements for July 9,000,000.00
Outstanding checks- June 30 (1,400,000.00)
Outstanding checks- July 31 1,000,000.00
Book disbursements for july 8,600,000.00
Problem3.4
Balance per bank statement, March 31 4,650,000.00
Bank deposits- April 5,840,000.00
Bank disbursements- April (4,970,000.00)
Balance per bank- April 30 5,520,000.00
Putstanding checks- April 30 (700,000.00)
Aadjusted cash in bank 4,820,000.00
Problem3.5
Balance per bank- November 31 1,804,000.00
December bank deposits 2,610,000.00
december bank disbursements (2,242,000.00)
Balance per bank-December 31 2,172,000.00
Outstanding checks- December 31 (250,000.00)
Adjusted cash in bank- December 31 1,922,000.00
Problem3.6
Problem3.7
Problem3.1
Balances Disbursement Balances
Nov.30 Receipts s Dec. 31
per bank statement 194,000.00 1,487,000.00 1,325,000.00 356,000.00
Outstanding checks
Nov. 30 (23,000.00) (23,000.00)
Dec. 31 40,000.00 (40,000.00)
Deposits in transit
Nov. 30 11,000.00 (11,000.00)
Dec 31 24,000.00 24,000.00
Interest on note discounted 900.00 900.00
NSF checks (4,000.00) (4,000.00)
Bank service charge (300.00) 300.00
Cancellation of check 1,400.00 (1,400.00)
Error in recordinf check no.1584 6,750.00 (6,750.00)
Cancellation of check no.1584 8,000.00 (8,000.00)
Counter check drawn by president (2,000.00) 2,000.00
Check of Chelsea charged in error (3,000.00) 3,000.00
Postdated check presented for payment (100,000.00) 100,000.00
Per book balances 182,000.00 1,496,900.00 1,248,850.00 430,050.00
(2) (3) (4)
Book Bank
Unadjusted balances 430,050.00 356,000.00
Oitstanding checks (40,000.00)
Deposits In transit (900.00) 24,000.00
Interest on note discounted (300.00)
Bank service charge 1,400.00
Cancellation of check no.1434 6,750.00
Error in recording check no,1562 8,000.00
Cancellation of chelsea charges in error (2,000.00)
Check of chelsea charged in error 3,000.00
Postdated check presented for payment (100,000.00)
adjusted balances 343,000.00 343,000.00
(5)
Problem3.2
Problem3.3
Adjusted balance
Problem3.4
Problem3.5
1) Checks written in December 405,500.00
AddL November bank service charges recorded in books in Dec 2,000.00
Total book disbursements in December 407,500.00
Problem3.6
Beginning Receipts
Balance per books 637,860.00 306,220.00
Note collected by bank in December 2,060.00
Overstatement od December book disbursement
Check stopped for payment (780.00)
Bank service charge in November (60.00)
Adjusted book balances 637,800.00 307,500.00
356,080.00 637,220.00
(64,140.00)
74,080.00 (74,080.00)
16,140.00
(180.00) 180.00
365,840.00 579,460.00