Practice Set: Financial Accounting - Cash and Cash Equivalents

Problem #1:
The accounting staff of ABC, Inc. recorded the following entries during the year:

Dec. 5, 2013 Cash 500,000

Sales 500,000
To record cash sales.

Dec 27, 2013 Cash 250,000

Accounts receivable 250,000
To record collection

Dec 30, 2013 Accounts receivable 50,000

Sales 50,000
To record sales on account

Upon examination by the Accounting Supervisor of the supporting documents of the above transaction, the
following data were revealed:
a. The official receipt supporting the cash sales discloses that the actual sales amounted only to P50,000.
b. The collection on December 27, 2013 pertains to a post-dated check amounting to P300,000. The staff
erroneously credited the customer’s account by P250,000. This was deposited on December 30, 2013
but was credited in the Company’s account on January 4, 2013.
c. The sale on account was collected in January 15, 2014.

The unadjusted book balance of the Company’s cash amounted to P7,000,000 which includes cash
deposited in BDO amounting to P200,000 approved by the Board of Directors (BOD) of for future plant
expansion.

How much is the adjusted cash as of December 31, 2013?

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Problem #2:

As of October 31, 2013, the fiscal year-end of XXX, Inc., the Company’s records and supporting documents
revealed the following data:

Passbook balance as of October 31, 2013 P500,000

Cash per unadjusted Trial Balance as of October 31, 2013 200,000
Deposit in transit 250,000
Bank charges recorded by the Company in November 2013 3,000
Interest from bank deposits (recorded by the Company in November 2013) 30,000
Outstanding check 600,000

Additional data:
a. The outstanding check includes post-dated (December 5, 2013) check amounting to P300,000.
b. Included in the deposit in transit is a post-dated check issued by the customer amounting to
P50,000. The check can only be encashed starting November 3, 2013.
c. The bank credited the Company’s account by P500,000 on November 3, 2013 for the loan it applied
in October 30, 2013.
d. The company erroneously recorded a cash sales amounting to P173,000 as follows:
Accounts Receivable 173,000
Sales 173,000
To record cash sales.

What is the adjusted cash balance as of October 31, 2013?

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There is a great difference between knowing and understanding it. – Charles Kettering
 Practice Set: Financial Accounting - Cash and Cash Equivalents

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There is a great difference between knowing and understanding it. – Charles Kettering
 Practice Set: Financial Accounting - Cash and Cash Equivalents

Problem #3:
Cash in bank – BDO account # xxxx144 P500,000
Cash in bank – BDO account # xxxx143 (250,000)
Cash in bank – BDO account # xxxx142 65,000
Cash in bank – CBC account # xxxx143 (300,000)
Cash in bank – BPI account # xxxx143 250,000
Petty cash fund 10,000
Cash in bank – UCPB account # xxxx144 6,000,000
Cash in bank – UCPB account # xxxx143 (2,000,000)
Cash in bank – UCPB account # xxxx142 10,000,000
Cash in bank – UCPB account # xxxx141 (payroll account) 80,000
Coins 2,000
Treasury shares 80,000
Money markets purchased last January 5, 2012 (maturity: January 1, 2014) 9,000,000
Money markets purchased last December 5, 2013, 160 days (maturity: March 1, 2014) 8,000,000
Notes:
a. UCPB account # xxxx142 is restricted for future plant expansion.
b. BDO account # xxx142 serves as guarantee deposit for the Company’s loan amounting to
P5,000,000. This is restricted for withdrawal.

How much is the adjusted cash and cash equivalents of LOL as of December 31, 2013?

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Problem #4:
Passbook balance as of October 31, 2013 P500,000
Cash per unadjusted Trial Balance as of October 31, 2013 200,000
Deposit in transit 20,000
Bank charges recorded by the Company in November 2013 3,000
Interest from bank deposits (recorded by the Company in November 2013) 27,000
Outstanding check ???

Additional data:
a. Included in the outstanding checks is check #143333 amounting to P50,000 released to payee in
November 4, 2013.

How much is the adjusted outstanding checks as of October 31, 2013?

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Problem #5:
Coins P20,000
Cash in bank - BDO 150,000
Cash in bank - BOT (100,000)
Cash in bank – Security Bank 200,000
Receivable from employee 10,000
Accounts Receivable collected in December 31, 2013 not yet recorded in the books 200,000
a. The Cash in Bank – Security Bank is restricted for withdrawal.
b. The collected Accounts Receivable includes post-dated check (January 15, 2014) amounting to
P30,000.

1. How much is the adjusted balance of cash and cash equivalents as of December 31, 2013?
2. How much will be presented as noncurrent asset as of December 31, 2013?

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There is a great difference between knowing and understanding it. – Charles Kettering