CASH AND CASH EQUIVALENTS

CASH BALANCE

Petty Cash Fund

1. Mr. Tomas Y. Lang, a businessman friend, has requested your help in explaining and solving the following problems that
confront his company, the T.Y. Lang Corp. A cash count on January 2, 1976 showed the following items in the petty cash
box:
Currency and coins counted P 12.56
Envelope containing contributions to employees party 90.00
Petty cash vouchers approved 14.50
Employees’ IOUs 180.00
Company check for fund replenishment 92.00
The petty cash fund was established for an amount of P300.00.
What is the correct amount of petty cash for the balance sheet as of the end of the year December 31, 1975? (E)
A. P300 C. P104.56
B. P12.56 D. Some other answer. RPCPA 1076

2. Account of the petty cash fund of XYZ Company showed its composition as follows
Coins and currency 3,300
Paid vouchers:
Transportation 600
Gasoline 400
Office supplies 500
Postage Stamps 300
Due from Employees 1,200 3,000
Manager’s Check returned by the bank marked NSF 1,000
Check drawn by company to the order of petty cash custodian 2,700
What is the amount of the petty cash fund for balance sheet purposes?

60. An account of the petty cash fund showed its composition as follows:
Coins and currency 2,000
Paid vouchers
Transportation 600
Gasoline 400
Office supplies 500
Postage stamps 300
Due from employees 1,200 3,000
Employees check returned by bank marked “DAIF” 1000
Check drawn by the company to the order of petty cash custodian 4000

What is the correct amount of petty cash fund?

A. 6,000 C. 9,000
B. 7.000 D. 10,000

1. The ledger account for petty cash of MARTY Co. as of December 31, 1990 showed a balance of P3,000. However, the
following items were found in the petty cash box:
Currency and coins P1,019.20
Vale slips from employees 535.00
An envelope containing cash collections to be donated
to earthquake victims by employees with list of names attached 115.00
Petty cash vouchers paid:
Telegram charges P 58.00
Office supplies 134.00
Transportation 124.50
Postage stamps 74.00 390.50
Check of an employee post-dated Jan. 5, 1991 200.00
Employee’s check marked NSF Jan. 5, 1991 350.00
Check drawn by MARTY Co. to petty cash 500.00
TOTAL P3,019.70

What is the correct amount of petty cash fund that should be shown on the balance sheet as of December 31, 1990?

A. P1,404.20 B. 1,519.20 C. P1,634.20 D. 1,524.50

14. The petty cash fund of Becky Company on December 31, 2008 is composed of the following:
Coins and currencies 16,000
Petty cash vouchers:
Postage stamps 2,000
Supplies 3,000
Cash advances to employees 4,000
Employee’s check returned by bank marked NSF 5,000
Check drawn by the company payable to the order of
Ms. Bobadilla, petty cash custodian, representing her salary 15,000
A sheet of paper with names of employees together
with contribution for a birthday gift of a co-employee
in the amount of 5,000
Total 50,000
The petty cash ledger account has an imprest balance of P50,000. What is the correct amount of petty cash on
December 31, 2008?
A. 16,000 B. 31,000 C. 36,000 D. 50,000

89. Kennison Company has cash in bank of P10,000, restricted cash in a separate account of 3,000, and a bank overdraft
in an account at another bank of P1,000. Kennison should report cash of (E)
a. P9,000. c. P12,000.
b. P10,000. d. P13,000.

91. Lawrence Company has cash in bank of P15,000, restricted cash in a separate account of P4,000, and a bank overdraft
in an account at another bank of P2,000. Lawrence should report cash of (E)
a. P13,000. c. P18,000.
b. P15,000. d. P19,000.

Cutoffs
 Cash receipts recorded in books but not yet deposited 14,150 A. P31,526.15 C
No sufficient fund check 3,500 B. P37,102.35 D

Note collected by bank, net of P400 service charges not 12,600

recorded in books
Following the “book to bank” procedure approach of reconciliation and based on the above 18. The cashier misplaced all the bank stat
the accounting data, what is the balance per bank statement on December 31, 1990? (M) records and discovered that the
reconcile the June 30,
A. P79,200 C. 2012 bank records and accounting
B. P79,600 P78,800 RPCPA 0591 records: Accounts receivable
D.
P52,200
Miscellaneous expense
Bank Credits & Charges, Interest, NSF Checks, Deposit in Transit & Outstanding Notes receivable 2
Checks, Bank
Error Interest revenue 1
17. On March 3, 2004, Able Company received its bank statement. However, the Cash 1
closing balance
of the account was unreadable. Attempts to contact the Pre-adjusting cash balance in the accounting records was
bank after hours did not secure the desired information. P768,370, outstanding checks were P20,750 and no other
Thus, you had to prepare a bank reconciliation from the adjustments were required.
available information summarized below: What is the bank statement balance at June 30, 2012? (E)
February 28 book balance A. P615,346. C. P656,846.
Note collected by bank B. P636,096. D. P768,370
Interest earned on note E 2012
NSF check of customer
Bank service charge on NSF check Adjusted Cash in Bank Balance
Other bank service charges Book & Bank to adjusted
Outstanding checks 19. Smith Co. has a checking account at Small Bank and an
Deposit of February 28 placed in night depository interest-bearing savings account at Big Bank. On
December 31, year 1, the bank reconciliations for
Check issued by Axle Company charged to Able’s Smith are as follows:
account Big Bank
statement? (M) Bank Bank balance P150,000
A. 1,435,000 C. 1,338,000 P1,500 Deposit in transit 5,000
B. 1,532,000 D. 1,557,000 Outstanding checks
CGAC Book balance 155,000
What amount should be classified as cash on Smith's
Constructive Accounting balance sheet at December 31, year 1? a. P148,000
3. Compute for the bank statement balance using the data P155,000 A
below. The cashier misplaced all the bank statements b. P151,000 d. P156,000
for the past year. You reviewed the accounting records
and discovered that the following journal entry was 20. Hazelton Manufacturing prepares a bank reconciliation
made to reconcile the June 30, 1994 bank records and at the end of every month. At the end of May, the
accounting records. general ledger checking account showed a balance of
Accounts receivable P1,360 and the bank statement showed a bank balance
of P1,445. Outstanding checks totaled P350 and
7,601.20 deposits in transit were P150. The bank statement
Miscellaneous expense 62.50 listed service charges of P30 and NSF checks totaling
Notes receivable P85. The corrected cash balance is: (D)
Interest revenue A. P1,130. C. P1,245.
Cash B. P1,160. D. P1,445.S&S
Preadjustment cash balance in the accounting records 6e
was P37,102.35, outstanding checks were P1,037.50
and no other adjustments were required. (M)
21. Brockton Carpet Cleaning prepares a bank promissory note, including interest of P1008,100
reconciliation at the end of every month. At the end of Check No. 2772 issued to a supplier entered in
July, the balance in the general ledger checking account the accounting records at
was P2,750 and the bank balance on the bank P2,100 but deducted in the bank statement at an
statement was P2,980. Outstanding checks totaled P680 erroneous amount of
and deposits in transited were P400. The bank
statement revealed that a check written for P120 was
incorrectly recorded by Brockton as a P220
disbursement. The bank statement listed service charges
and NSF check charges totaling P150. The corrected
cash balance is: (D)
A. P2,270. C. P2,470.
B. P2,550. D. P2,700.
6e

21. While checking the cash accounts of Bauer Company

on December 31, 2009, you find the following
information:
Balance per book
Balance in checking account (outstanding
checks per book of P1,660,000) 7,000,000
Deposit in bank closed by BSP
Deposit in transit
Currency and coins on hand
Petty cash fund (of which P10,000 is in form of
paid vouchers)
50,000 Bank charges not yet taken up in book
10,000 Bond sinking fund cash
Receivables from employees
Error in recording a check in the
book. The correct amount as
paid by the bank is P100,000
instead of P150,000 as
recorded in the
book or a difference of
The correct cash in bank balance
for Bauer on December 31, 2009
is A. 6,540,000 C. 6,980,000
B. 6,640,000 D. 8,040,000
Siy

1. The following data pertaining to the cash transactions

and bank account of Mandirigma Company for the
month of May are available to you:
Cash balance, per records, May 31
Cash balance, per bank statement, 5/31
service charge for May

Debit memo for the cost of printed checks delivered

by the bank
Outstanding checks, May 31
Deposit of May 30 not recorded by bank until June
1
Proceeds of a bank loan of May 30, net of
interest of P300
 Stolen check lacking an authorized signature,
deducted from Mandirigma's
account by the bank in error
Customer's check returned by the bank marked NSF;
no entry has
been made in the accounting records to record the
returned check
What is the correct cash balance at May 31?
A. P29,200 C. P30,300
B. P30,000 D. P30,900
Cabarles

13. Rudi Company keeps all its cash in a checking account. An

examination of the company’s accounting records and
bank statement for the month ended June 30, 2012
revealed the following information:
The cash balance per book on June 30 is P12,000,000
A deposit of P2,000,000 that was placed in the bank’s night
depository on June 30 does not appear on the bank
statement
The bank statement shows on June 30, the bank
collected note for Rudi and credited the proceeds of
P1,400,000 to the company’s account
Checks outstanding on June 30 amount to P500,000
Rudi discovered that a check written in June for
P200,000 in payment of an account payable, had
been recorded in the company’s records as
P300,000
Included with the June bank statement was NSF
check for P400,000 that Rudi had received from a
customer on June 26
The bank statement shows a P50,000 service charge for
June
The cash in bank to be shown on the
balance sheet on June 30, 2012 is (E)
A. P11,500,000 C. P13,050,000
B. P12,850,000 D. P13,500,000
Cabarles

Bank & Book to Adjusted

6. The ledger account of Bally Company showed a
ledger balance of P1,800,000 on December 31, 2008.
The bank statement as of that date showed a balance
of P2,100,000. Upon comparing the statement with
the cash records, the following facts were determined:
 There were bank service charges for December of
P10,000.
 A bank memo stated that Alex Inc.’s note for P200,000
and interest of P20,000 had been collected on
December 29, and the bank has made a charge of
P5,000 on the collection. No entry had been made
in Bally’s books when Alex’ note was sent to the
bank for collection.
 Receipts for December 31 for P550,000 were not
deposited until January 2.
 Checks outstanding on December 31 totaled
P325,000.
 The bank had charged the Bally’s Company’s account
for a customer’s uncollectible check amounting to
P43,000 on December 29.
  A customer’s check for P900,000 had been entered as C
P600,000 in the cash receipts journal by Bally on o
December 15. .
 Check no. 777 in the amount of P141,000 had been
entered in the cash book as P114,000, and check B
no. 799 in the amount of P10,000 had been entered a
as P100,000. Both checks had been issued to pay for n
purchases of equipment. k
What is the amount of cash to be shown in the
December 31, 2008 balance sheet? A. R
1,875,000 C. e
2,226,000 c
B. 2,195,000 D. 2,325,000 Siy o
n
6. The bookkeeper of Ifugao Company recently prepared c
the following bank reconciliation on December 31, i
2003: l
Balance per bank statement i
Add: Deposit in transit a
t
200,000 i
Checkbook printing charge 5,000 o
Error made in recording n
check No. 2501 (issued in
December) 100,000 D
Customer check marked DAIF 45,000 e
350,000 c
Total e
Deduct: Outstanding checks m
b
300,000 e
Note collected by bank (includes P25,000 r
interest) 250,000
Balance per book 3
cash on hand on December 31, 2003. The amount to 1
be reported as cash on the balance sheet as of ,
December 31, 2003 should be (M)
1
A. 5,400,000 C. 4,900,000
9
B. 5,900,000 D. 5,800,000
9
CPAR 4121
8
25. The bookkeeper of Santa Clara Co. recently prepared
Balance per bank statement
the following bank reconciliation:
Add:
S
Deposit in transit
a
n
P8,700
t
Checkbook printing charge 210
a
Error made in recording check No. 25
(issued in December) 1,600
C
NSF check 5,000 15,
l
P141,930
a
r
a
 Deduct:
Outstanding checks

P4,480
Note collected by bank (includes P50
interest 9,500
13,980
Balance per books P127,950
Santa Clara has P9,100 cash on hand on December 31,
1998.
The amount Santa Clara should report as cash on the
balance sheet as of December 31, 1998 should be (D)
A. P120,260 C. P130,640
B. P139,740 D. P132,240
RPCPA 0598

22. Divine Grace Company keeps all its cash in a

checking account. An examination of the company's
records for the month ended December 31, 2004
revealed a bank statement balance of P45,000,000
and a book balance of P50,000,000.
A deposit of P12,000,000 placed in the bank's might
depository on December 29, 2004 does not appear on
the bank statement. Checks outstanding on December
31, 2004 amount to P3,000,000.
The bank statement shows that on December 15. 2004,
the bank collected a note for Divine Grace and credited
the proceeds of P5,500,000 to the company’s account. The
proceeds included an interest of P500,000, all of which
Divine Grace earned during 2004.
Divine Grace Company discovered that a check
written on December 20, 2004 for P900,000 in
payment of an account had been recorded by Divine
Grace as P600,000
Inducted with the December 31, 2004 bank statement
was an NSF check of P1,000,000. The bank statement
also shows a P200,000 service charge.
The cash in bank on December
31, 2004 balance sheet should be
(M) A. 54,000,000 C. 54,300,000
B. 53,500,000 D. 50,000,000
CPAR
A. 4,500,000 C. 5,400,000
B. 5,350,000 D. 5,550,000

7. What is the amount of cash receipt per ledger for July?

A. 8,400,000 C. 9,400,000
B. 9,000,000 D. 9,600,000

8. What is the amount of cash

disbursements per ledger
for July? A. 6,550,000 C.
6,850,000
B. 6,700,000 D. 7,000,000