POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

STA MESA, MANILA

October 2021
Activity 01 Instructor: John Bo S. Cayetano

1) The following data pertain to Lincoln Corporation on December 31, 2021:

Current account at Metrobank P1,800,000

Current account at Allied Bank (100,000)
Payroll account 500,000
Foreign bank account (in equivalent pesos) 800,000
Savings deposit in a closed bank 150,000
Postage stamps 1,000
Employee’s post dated check 4,000
IOU from employees 10,000
Credit memo from a vendor for a purchase return 20,000
Traveler’s check 50,000
Money order 30,000
Petty cash fund 4,000
Pension fund 2,000,000
DAIF check of customer 15,000
Customer’s check dated 1/10/22 80,000
Time deposit – 30 days 200,000
Money market placement (due in 6 months) 500,000
Treasury bills, due 3/31/22 (purchased 12/31/21) 200,000
Treasury bills, due 1/31/22 (purchased 2/1/21) 300,000

The cash and cash equivalents as of December 31, 2021 is

A. 2,784,000 B. 3,084,000 C. 3,734,000 D. 3,584,000

2) The controller of an entity is in the process of preparing the financial statements for the current year. The
following items are being considered.

● Balances in the entity’s accounts at the First Bank checking P1,350,000, savings P250,000.
● Undeposited customer checks of P50,000.
● Currency and coins on hand of P40,000.
● Savings account at the Second Bank with a balance of P4,000,000. This account is being used to
accumulate cash for future plant expansion.
● P200,000 in a checking account at the Second Bank. The balance in the account represents a 20%
compensating balance for a P1,000,000 loan with the bank. The entity may not withdraw the funds until
the loan is due in three years.
● Treasury bills: 2-month maturity bills P150,000 and 7-month bills P200,000.

What amount should be reported as cash and cash equivalents?

A. 1,840,000 B. 2,040,000 C. 2,140,000 D. 5,840,000

3) The following data pertains to Michael Trading on April 30:

Correct cash balance in a general checking account with BDO 320,000

Overdraft in a special checking account in General Bank (Michael Trading does not have
another account with General Bank) 20,000
Cash accumulated in a special fund that will be used for plant expansion in five years 150,000
Cash surrender value of life insurance policy 32,000
Currency and coins in petty cash fund (the company has not replenished the fund to the
imprest amount of P2,000) 580

How much cash should Michael report on April 30?

A. 332,580 B. 320,580 C. 322,000 D. 302,000

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4) The statement of financial position of Vuitton Company shows cash of P237,390. The following items were
found to comprise this amount:
Cash in Metrobank, per bank statement (outstanding checks as of year-end totaled 99,320
P5,200)
Savings account at Far East Bank 30,800
Petty cash fund (including expense receipts of P250) 1,500
Cash on hand (undeposited sales receipts) 4,200
Sinking fund cash 20,000
Cash in foreign bank (in equivalent pesos) 62,000
Customer’s checks on hand:
Traveler’s check 4,450
Certified check 3,120
90-day, BSP treasury bills 12,000

What is the correct amount of cash and cash equivalents in Vuitton Company’s statement of financial
position?
A. 231,940 B. 211,940 C. 199,820 D. 196,820

5) The cash account of Hoot Corporation on Dec. 31, 2022 has a balance of P127,600 and it consists of the
following:

Bills and coins hand 52,780

Petty cash including petty cash vouchers of P650 1,000
Balance in saving account with a bank closed by the BSP 36,000
Customer’s check dated January 15, 2023 8,000
Credit memo from suppliers for purchases returns 6,500
Postage stamps 120
Money order 800
IOU of employee 400
Checking account balance in BPI 22,000

The correct cash balance on December 31, 2022 of Hoot Corporation is

A. 76,580 B. 76,330 C. 75,130 D. 75,930

Use the following information for the next two (2) questions:
On December 31, 2022, Mr. Taxi Company reported cash account balance per ledger of P3,600,000:
Cash in bank – demand deposit 1,500,000
Time deposit – 30 days 500,000
NSF check of customer 20,000
Money market placement due on June 30, 2023 1,000,000
Saving deposit 50,000
IOU from an employee 30,000
Pension fund 400,000
Petty cash fund 10,000
Customer check dated January 31, 2023 60,000
Customer check outstanding for 18 months 30,000
3,600,000

Additional information:
● Check of P100,000 in payment of accounts payable was dated and recorded on December 31, 2022 but
mailed to creditors on January 15, 2023.

● Check of P50,000 dated January 31, 2023 in payment of accounts payable was recorded and mailed Dec.
31, 2017.

● The cash receipts journal was held open until January 15, 2022, during which time P200,000 was collected
and recorded on December 31, 2022.

6) What total amount should be reported as cash on December 31, 2022?

A. 1,510,000 B. 1,650,000 C. 1,150,000 D. 1,300,000

7) What total amount should be reported as cash and cash equivalents on December 31, 2022?
A. 2,010,000 B. 1,960,000 C. 1,860,000 D. 1,510,000

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8) Insaritarius Company provide the following data on December 31, 2017:
Petty cash fund 25,000
Cash on hand 500,000
Current account 1,250,000
Cash in sinking fund 1,500,000
Money market placement 1,000,000
Saving deposit – set aside for dividend payable on June 30, 2018 250,000

The petty cash fund included unreplenished petty cash vouchers of P10,000. The cash on hand included a
customer check of P200,000 received on December 15, 2017 but dated January 15, 2018. The sinking
fund is restricted for the payment of bonds payable that is due on July 31, 2019. What amount of cash and
cash equivalents should be reported on December 31, 2017?
A. 1,815,000 B. 2,815,000 C. 3,315,000 D. 4,315,000

9) Black Legion Company reported the following information at the end of the current year:
● Investment securities of P1,000,000. These securities are share investments in entities that are traded
in the Philippine Stock Exchange. As a result, the shares are very actively traded in the market.
● Investment securities of P2,000,000. These securities are government treasury bills. These securities
are government treasury bills. The treasury bills have a 10-year term and purchased December 31 at
which time they had two months to go until they mature.
● Cash of P4,500,000 in form of coin, currency, saving account and checking account.
● Investment securities of P1,500,000. These securities are commercial paper. The term of the papers is
nine months and they were purchased on December 31 at which time they had three months to go
until they mature.

How much should be reported as Cash and Cash Equivalents at the end of the current period?
A. 6,500,000 B. 7,500,000 C. 8,000,000 D. 9,000,000

10) Gee Company had the following account balances at December 31, 2022:
Savings and demand deposits 5,000,000
Currency and coins 200,000
Time deposits 500,000
Bond sinking fund cash for bonds payable due June 30, 2023 1,000,000
Cash restricted for additions to plant expected to be disburse in 2023 2,000,000
Preference share redemption fund (redemption date May 31, 2024) 2,500,000

Cash in bank included P1,000,000 compensating balance against short-term borrowing arrangement. The
compensating balance is not legally restricted as to withdrawal by Gee. What amount should be reported
as total cash on December 31, 2022?
A. 6,200,000 B. 5,200,000 C. 4,200,000 D. 6,700,000

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