Problem 1 – 1 (IAA)

On December 31, 2020, Albania Company provided the following data:

Cash in bank 3,000,000

Time deposit – 30 days 1,000,000
Money market placement due on June 30,2021 2,000,000
Saving deposit in closed bank 100,000
Sinking fund for bond payable due June 30,2022 1,500,000
Petty cash fund 20,000

v The cash in bank included customer check of P200,000 outstanding for 18 months.

v Check of P250,000 in payment of accounts payment of accounts payable was dated and recorded on
December 31,2020 but mailed to creditors in January 15,2021.

v Check of P100,000 dated January 31,2021 in payment of accounts payable was recorded and mailed
December 31,2020.

v The reporting period is the calendar year.

The cash receipt journal was held open until January 15,2021 during which time an amount of
P450,000 was collected and recorded on December 31,2020.

Required:

1. Prepare adjusting entries on December 31,2020.

2. Compute the total amount of cash and cash equivalent that should be reported on December
31,2020.
3. Explain the presentation of the items excluded from cash and cash equivalents.
Problem 1 – 2 (IAA)

Argentina Company reported the following accounts on December 31,2020.

Cash on hand 1,000,000

Petty cash fund 50,000
Security Bank current account 2,000,000
PNB current account 1,500,000
BDO current account (overdraft) ( 200,000)
BSP treasury bill – 120 days 3,000,000
BPI time deposit – 90 days 2,000,000
Bond sinking fund 2,500,000

v The cash on hand included a customer postdated check of P150,000 and postal money order of
P50,000.

v The petty cash fund included unreplenished petty cash vouchers for P10,000 and an employee check
for P5,000 dated January 31,2021.

v The BPI time deposit is set aside for acquisition of land to be made in early January 2021.

v The bond sinking fund is set aside for payment of bond payable due December 31,2021.

Required:

1. Prepare adjusting entries on December 31,2020.

2. Compute the total amount of cash and cash equivalents.
3. Explain the presentation of the items excluded form cash and cash equivalents.
Problem 1 – 10 (AICPA Adapted)

Tranvia Company revealed the following information on December 31,2020:

Cash in checking account 350,000

Cash in money market account 750,000
Treasury bill, purchased November 1,2020
maturing January 31,2021 3,500,000
Time deposit purchased December 1,2020
maturing March 31,2021 4,000,000

What amount should be reported as cash and cash equivalents on December 31,2020?

a. 1,100,000
b. 3,850,000
c. 4,600,000
d. 8,600,000

Problem 1 – 11 (IAA)

Affable Company provided the following information at year-end comprising the cash –account:

Cash in bank – demand deposit 5,000,000

Cash on hand 400,000
Postage stamps unused 5,000
Certificate of time deposit 1,500,000
Money order 50,000
Manager check 100,000
Traveler check 1,000,000
Postdated 500,000

What total amount should be reported as cash at year-end?

a. 8,050,000
b. 7,050,000
c. 6,550,000
d. 6,450,000
Problem 1 – 12 (AICPA Adapted)

Thor Company provided the following data on December 31,2020:

Checkbook balance 4,000,000

Bank statement balance 5,000,000
Check drawn on Thor’s account, payable to supplier,
dated and recorded on December 31,2020 but not
mailed until January 31,2021 500,000
Cash in sinking fund 2,000,000

On December 31,2020, what amount should be reported as cash under current assets?

a. 4,500,000
b. 5,500,000
c. 3,500,000
d. 6,500,000
Problem 1 – 13 (AICPA Adapted)

Joana Company had the following account balances on December 31,2020:

Petty cash fund 50,000

Cash on hand 500,000
Cash in bank – current account 4,000,000
Cash in bank – payroll account 1,000,000
Time deposit 2,000,000
Cash in bank – restricted account for plant addition,
expected to be disbursed in early 2021 500,000
Cash in sinking fund set aside for bond payable due
June 30,2021 1,500,000

The petty cash fund included unreplenished December 2020 petty cash expense vouchers of P5,000 and
employee IOU of P5,000.

The cash on hand included a P100,000 check payable to the entity dated January 31,2021.

What total amount should be reported as cash and cash equivalent on December 31,2020?

a. 6,940,000
b. 8,940,000
c. 7,940,000
d. 7,440,000

Problem 1 – 14 (AICPA Adapted)

On December 31,2020 Lamentable Company had the following cash balance:

Cash in bank – current account 6,000,000

Petty cash fund – all funds were reimbursed at year – end 50,000
Time deposit – three months, due January 15,2021 2,500,000
Saving deposit 1,000,000

Cash in bank in included P 400,000 of compensating balance against short term borrowing arrangement.

The compensating balance us legally restricted as to withdrawal.

What total amount should be reported as cash and cash equivalents?

a. 9,500,000
b. 9,150,000
c. 9,100,000
d. 6,950,000
Problem 1 – 15 (AICPA Adapted)

Baloney Company had the following account balance on December 31,2020:

Cash in bank 2,250,000

Cash on hand 125,000
Cash restricted for addition to plant in 2021 1,600,000

Cash in bank included P 600,000 of compensating balance against short – term borrowing arrangement.

The compensating balance is not legally restricted as to the withdrawal.

What total amount should be reported as cash on December 31,2020?

a. 1,775,000
b. 2,250,000
c. 2,375,000
d. 3,975,000

Problem 1 – 16 (IAA)

Yasmin Company provided the following on December 31,2020:

Petty cash fund 50,000

Current accounts – First Bank 4,000,000
Current account 0 Second Bank (overdraft) ( 250,000)
Money market placement – Third Bank 1,000,000
Time deposit – Fourth Bank 2,000,000

• A check for P100,000 was drawn against First Bank current account dated and recorded December
29,2020 but delivered to payee on January 15,2021.
• The Fourth Bank time deposit is set aside for land acquisition in early January 2021.

What total amount should be reported as cash and cash equivalents on December 31,2020?

a. 5,050,000
b. 5,150,000
c. 4,900,000
d. 4,150,000
Problem 1 – 17 (IAA)

On December 31,2020, Roma Company reported cash balance on P9,950,000.

Undeposited collections 600,000

Cash in Bank – BDO checking account 4,000,000
Undeposited NSF check received from customer,
Dated December 1,2020 150,000
Undeposited check from a customer, dated January 15,2021 250,000
Cash in bank – BDO fund for payroll 1,000,000
Cash in bank – BDO time deposit, 90 days 2,000,000
Cash in foreign bank restricted 1,500,000
Cash in bank – BDO value added tax account 450,000
Total 9,950,000

On December 31,2020, what total amount should be reported as cash and cash equivalents?

a. 7,600,000
b. 8,200,000
c. 6,050,000
d. 8,050,000
Problem 1 – 18 (AICPA Adapted)

Aruba Company had a checkbook balance on December 31,2020 of P8,000,000 and held following items
in the safe.

Check payable to Aruba, dated January 5,2021

Included in December 31 checkbook balance 2,000,000

Check payable to Aruba deposited December 20,

and included in December 31 checkbook balance
But returned by bank on December 30, stamped
“NSF”. The check was redeposited January 2,2021,
And cleared January 3,2021. 500,000

Check drawn on Aruba’s account and payable to a vendor,

Dated and recorded December 31 but not mailed
Until January 15,2021 1,500,000

Cash on hand – undeposited collections 400,000

Change fund 40,000
Time deposit for plant expansion 1,000,000
Treasury bill 2,500,000
Money market placement 3,000,000
Postage stamps unused 10,000

1. What amount should be reported as cash on December 31,2020?

a. 7,400,000
b. 7,440,000
c. 8,440,000
d. 7,450,000

2. What total amount should be reported as cash equivalents on December 31,2020?

a. 6,500,000
b. 3,000,000
c. 5,500,000
d. 2,500,000
Problem 1 – 19 (IAA)

Ecstasy Company reported the following information at the end of the current year.

• Share investments of P1,000,000 that are actively traded in the Philippine Stock Exchange.
• Government treasury bills of P2,000,000.

The treasury bills have a 10 – year term and purchased on December 31 at which time they had two
months to go until they mature.

• Cash of P3,400,000 in the form of coins, currency, saving account and checking account.
• Commercial papers pf P1,500,000.

The term of the commercial papers is nine months and the instruments were purchased on
December 31 at which time they had three months to go until the mature.

1. What total amount should be reported as cash at the end of current year?

a. 3,400,000
b. 5,400,000
c. 4,900,000.
d. 6,900,000

2. What total amount should be reported as cash equivalent at the end of current year?

a. 3,500,000
b. 4,500,000
c. 1,500,000
d. 2,500,000

Problem 1 -20 (PHILCPA Adapted)

Marjorie Company established a petty cash fund of P50,000 with the following information:

Coins and currency 22,000

Petty cash vouchers:
Gasoline 3,000
Medical supplies 1,000
Repair 1,500
IOU from an employee 3,500
Check drawn payable to the order of Ann Cruz, petty cash
Custodian, representing her salary 15,000
Check of an employee returned by bank marked “NSF” 3,000
A sheet of paper with the names of several employees
Together with a contribution for a birthday party
And attached to the sheet of paper is a currency of 5,000
What amount of petty cash fund should be reported?

a. 42,000
b. 27,000
c. 37,000
d. 22,000

Problem 1 – 21 (PHILCPA Adapted)

Admirable Company had a petty cash fund which included the following details:

Coins and currency 2,000

Paid vouchers
Transportation 600
Gasoline 400
Office Supplies 500
Postage stamps 300
Due from employees 1,200 3,000
Employee’s check returned by bank marked “NSF” 1,000
Check drawn to the order of petty cash custodian 4,000

What amount of petty cash should be reported?

a. 2,000
b. 7,000
c. 6,000
d. 9,000
Problem 1 – 22 (ACP)

Love Company reported the following information in relation to cash on December 31,2020:

• Checkbook balance, P4,000,000.

• Undeposited collections, P400,000.
• A customer check amounting to P200,000 dated January 2,2021 was included in the December
31,2020 checkbook balance.
• Another customer check for P500,000 deposited on December 22,2020 was included in the
checkbook balance but returned by the bank for insufficiency of fund.

This check was redeposited on December 26,2020 and cleared two days later.

• A P400,000 check payable to supplier dated and recorded on December 30,2020 was mailed on
January 16,2021.
• A petty cash fund of P50,000 comprised the following on December 31,2020:

Coins and currencies 5,000

Petty cash and vouchers 40,000
Refundable deposits for returnable containers 5,000
50,000

• A check of P40,000 was drawn on December 31,2020 payable to Petty Cash.

1. What is the adjusted cash in bank on December 31,2020?

a. 4,600,000
b. 4,200,000
c. 4,400,000
d. 3,700,000

2. What total amount should be reported as cash on December 31,2020?

a. 4,645,000
b. 4,845,000
c. 4,600,000
d. 4,650,000