Activity 1. Lina Reyes is the cashier of the Luzon Glass Company.

As representative of the Santos, Tan and

Associates, CPAs, you were assigned to verify her cash on hand in the morning of January 04, 2021. You
began to count at 9:00 A.M. in the presence of Miss Reyes. In the course of your counting, you found
currencies in paper bills and coins together with checks, vouchers and other items, which are mentioned
below:

Bills:
9 one hundreds
25 fifties
50 twenties

Coins
10 pesos- 12 rolls (10 pieces to a roll)
5 pesos- 4 rolls and 5 loose (50 pieces to a roll)
1 peso- 8 rolls and 15 loose (100 pieces to a roll)
25 centavos- 2 rolls and 2 loose (500 pieces to a roll)
10 centavos – 3 rolls and 40 loose (500 pieces to a roll)
5 centavos- 2 rolls (400 pieces to a roll)

Checks
Maker Date Payee Amount
Rose Manalo, 12/23/2020 Luzon Glass Co. P600.00
Assistance Manager
Miss L. Reyes, Cashier 12/26/2020 Luzon Glass Co. P400.00

I.O.U.s
A. David, Janitor 12/20/2020 P350.00
R. Tirao, Clerk 12/22/2020 P250.00
Pedro Munar, Bookkeeper 12/24/2020 P150.00

Petty Cash Vouchers for Replenishment

Payee Date Account Charged Amount
L. Cruz, Messenger 12/16/2020 Advances to Employees P100.00
Rosario & Co. 12/18/2020 Supplies P145.00
Victory Liner 12/18/2020 Freight-in P182.50
Bureau of Posts 12/18/2020 Supplies P300.00
(stamps)
A. Vallo, Carpenter 12/20/2020 Repairs P450.00
B. Tello 12/21/2020 Miscellaneous Expense P154.00
Your investigation also disclosed the following:
1. The balance of petty cash fund per book is P9,000.00
2. Cash sales of January 2, 2021 amounted to P8,650.00 per sales records, while cash receipts book,
and deposit slip showed that only P7,650.00 was deposited in the bank on January 3, 2021.
3. The following employees’ pay envelopes have been opened and the money removed. Each
envelope was marked “unclaimed”.
N. Roy P332.50
G. Gloria P247.50

Requirement:
1. Prepare working paper showing your cash count.
2. Prepare necessary adjusting journal entries without explanation as of December 31, 2020.
3. Determine the amount at which the Petty Cash Fund will be stated in the balance sheet as of
December 31, 2020.

Activity 2. The following are the unadjusted cash balances of Bulacan Corporation for the month ended
June 30, 2021:

Cash balances per bank statement, June 30, 2021 P249,223.00

Cash balance per company records, June 30, 2021 248,758.80

The bank statement disclosed the following information:

1. A customer note for P24,000 plus P240 interest was collected on June 30, 2021.
2. A customer check for P2,762.80 was returned because of insufficient funds (NSF check).
3. The month service charge was P300.00

A review of the company records disclosed the following:

1. A deposit for P22,857.40 mailed to the bank on June 29, 2021 did not appear on the bank
statement.
2. Customer checks totaling P6,548 were on hand at the end of June awaiting deposit.
3. The following company checks were outstanding at the end of June:
#862 P1,923.80
#864 2,943.60
#865 5,265.00
4. Check #843 written for P1,824.00 in payment of a creditor account and included with the canceled
checks in the bank statement has been erroneously recorded as P384.00 in the company records.

Requirement:
1. Prepare a bank reconciliation to properly reflect the adjusted cash balance.
2. Prepare necessary adjusting journal entries to record those items not previously included in the
company records.

Activity 3. The following are the unadjusted cash balances of Bulacan Corporation for the month ended
June 30, 2021:

Cash balances per bank statement, June 30, 2021 P249,223.00

Cash balance per company records, June 30, 2021 248,758.80
The bank statement disclosed the following information:
1. A customer note for P24,000 plus P240 interest was collected on June 30, 2021.
2. A customer check for P2,762.80 was returned because of insufficient funds (NSF check).
3. The month service charge was P300.00

A review of the company records disclosed the following:

1. A deposit for P22,857.40 mailed to the bank on June 29, 2021 did not appear on the bank
statement.
2. Customer checks totaling P6,548 were on hand at the end of June awaiting deposit.
3. The following company checks were outstanding at the end of June:
#862 P1,923.80
#864 2,943.60
#865 5,265.00
4. Check #843 written for P1,824.00 in payment of a creditor account and included with the canceled
checks in the bank statement has been erroneously recorded as P384.00 in the company records.
5. May 31, 2021 bank balance P272,348.40
6. Deposit in transit (May 2021) received by the bank on June 02, 2021 24,803.00
7. Total receipts recorded by the bank during June, 2021 528,423.40
8. Total payments recorded by the bank during June, 2021 551,548.80
9. May 31, 2021 book balance 289,630.40
10. Outstanding checks on May 31, 2021
#781 3,263.00
#782 4,258.00
11. Total receipts per books during June, 2021 508,785.80
12. Total payments per books during June, 2021 549,657.40

Requirement:
Prepare a proof of cash

Activity 4. The following information has been extracted from the accounting records of the Oracle
Corporation:
1. Cash on hand (undeposited sales receipts) P1,020
2. Certificates of deposit 25,000
3. Customer’s note receivable 1,000
4. Reconciled balance in First Standard Bank checking account (350)
5. Reconciled balance in Prime National Bank checking account 9,350
6. Balance in Rural Bank savings account 8,560
7. Customer’s postdated check 1,350
8. Employee travel advances 1,600
9. Cash in bond sinking fund 1,200
10. Bond sinking fund investments 8,090
11. Postage stamps 430

Requirement:
Determine the balance in Oracle’s Cash account and discuss the balance sheet treatment of any items not
included as cash.
Activity 5. The December 31, 2020 bank statement for Miguel Corporation showed a P2,049.25 balance.
On this date the company’s Cash account reflected a P325.60 overdraft. In reconciling these amounts, the
following information is discovered:
1. Cash on hand for undeposited sales receipts, December 31, 2020, P130.25
2. Customer NSF check returned with bank statement, P420.40
3. Cash sales of P640.25 for the week ended December 18, 2020 were recorded on the books. The
cashier reports this amount missing and it was not deposited in the bank.
4. Note receivable of P2,500 and interest of P25 collected by the bank and not recorded on the
books.
5. Deposit in transit December 31, 2020, P350
6. A customer check for P290.40 in payment of its account was recorded on the books at P940.20
7. Outstanding checks, P2,040.55. Includes a duplicate check of P70.85 to G. Violet, who notified
Miguel that the original was lost. Miguel stopped payment on the original check and has already
adjusted the cash account in the accounting records for this amount.

Requirement:
1. Prepare a December 31, 2020 bank reconciliation for Miguel Corporation.
2. Prepare any journal entries necessary by Miguel Corporation to record the information from
Requirement 1.

Activity 6. The Ayesa Company received a bank statement for February 2021, as follows:
From: Standard Bank, Manila
To: Ayesa Company, Legarda St., Manila

Date Checks Deposits Balance

Feb. 1 P4,524.80
7 P2,700.33 P8,642.61
9 3,484.81
14 6.00 SC 460.00 CM
16 274.09
21 4.133.60 3,385.49
23 69.69 NSF
28 P6,344.38

SC= Service Charge

CM= Credit Memo
NSF= Check Returned
DM= Debit Memo

The receipt of P460 on February 14, 2021 was for a P445 note collected by the bank, plus P20 current
interest, less a P5 service charge. The company’s accounting records contained the following information:

Cash balance on February 28, 2021 from the books: P2,610.42

Cash Disbursements Cash Receipts

Check No. 155 P2,700.33 February 7 P8,624.61
Check No. 156 3,484.81 February 21 3,385.49
Check No. 157 274.09 All receipts are verified and correct
 Check No. 158 589.02
Check No. 159 4,133.60
Check No. 160 2,742.63

Requirement:
1. Prepare a bank reconciliation on February 28, 2021 for the Ayesa Company.
2. Prepare the journal entries that the Ayesa Company should record as a result of the reconciliation.

Acitivty 7. Duke Equipment Co. closes its books regularly on December 31, but at the end of 2020 it held
its cash book open so that a more favorable balance sheet could be prepared for credit purposes. Cash
receipts and disbursements for the first 10 days of January of the following year were recorded as
December transactions. The following information is given.
1. January cash receipts recorded in the December cash book totaled P39,640, of which P22,000
represents cash sales, and P17,640 represents collections on account for which cash discounts of
P360 were given.
2. January cash disbursements recorded in the December check register liquidated accounts payable
of P26,450 on which discounts of P250 were taken.
3. The ledger has not been closed for 2020.
4. The amount shown as inventory was determined by physical count on December 31, 2020.

Requirement:
1. Prepare any entries you consider necessary to correct Duke’s account at December 31.
2. To what extent was Duke Equipment Co. able to show a more favorable balance sheet at
December 31 by holding its cash book open? (Use ratio analysis). Assume that the balance sheet
that was prepared by the company showed the following amounts:

Debit Credit
Cash P39,000
Receivables 42,000
Inventories 67,000
Accounts Payable P45,000
Other current liabilities 14,200