ACCCOB2 ONLINE LEARNING, TERM 3 AY2020-2021

STUDENT-LED GROUP ACTIVITY

De La Salle University
ACCCOB2 – FINANCIAL ACCOUNTING
Term 3 AY2020-2021
Topic: Cash and Cash Controls

Instructions. Answer must be submitted in excel spreadsheet. Submission is through Animospace.

ACTIVITY 1: Components of Cash and Cash Equivalents

I. For each individual situation, determine the amount that should be reported as Cash and
Cash equivalents. If the item(s) is not reported as cash and cash equivalents, explain the
rationale.

The following information has been extracted from the accounting records of La Salle Company at
December 31,2020:
• Cash on hand (Undeposited Sales Receipts) 40,800
• Certificate of Time deposit with maturity of 3 months 400,000
• Customer's note receivable 50,000
• Reconciled balance in Vico Bank checking account 600,000
• Reconciled balance in Isko Bank checking account 700,000
• Balance in Belmonte savings account (30,000)
• Customer's postdated check 60,000
• Employee travel advances 5,000
• Cash in bond sinking fund 54,000
• Bond sinking fund investments 458,900
• Postage stamps 12,000

II. For each individual situation, determine the amount that should be reported as Cash. If the
item(s) is not reported as cash, explain the rationale.

The Statement of Financial Position of Joey Company shows cash of P 330,570. The following items
were found to comprise this total amount:
• Checking account in BPI (outstanding checks as of year-end totaled 15,200) 105,200
• Savings account at UST Bank 30,800
• Petty cash fund 1,250
• Cash on hand (undeposited sales receipts) 4,200
• Sinking fund cash 35,000
• Cash in foreign bank account (in equivalent pesos) 65,000
• Customer's check on hand:
Traveler's check 14,000
Manager's check 23,120
• Short-term Treasury Bills 52,000

III. The controller of the La Salle Company is trying to determine the amount of Cash and Cash
Equivalents" to be reported on its December 31,2019, Statement of Financial Position/ The
following information is provided:

• Balance in the company's account at the Taft Bank:

§ Checking account - P640,000
§ Savings account - P984,000
• Undeposited customer checks of P308,000.
• Currency and coins on hand of P123,200
• Savings account at the Pasay Bank with balance of P450,000. This account is being used to
ACCCOB2 ONLINE LEARNING, TERM 3 AY2020-2021

STUDENT-LED GROUP ACTIVITY

accumulate cash for future plant expansion in 2022.

• P900,000 balance in a checking account at the Pasay Bank. In exchange for a line of credit, La Salle
Company has agreed to maintain a minimum balance of P200,000 in this account.
• Treasury bills - 30-day maturity bills totaling P700,000 and the 180-day bills totaling P900,000.

What amount should be reported in the current asset section as "Cash and Cash Equivalents"?
Explain why the item should not form part of the Cash and Cash Equivalents.

ACTIVITY 2: Bank Reconciliation

IV. Sun COMPANY provided following information on December 31, 2020:

Cash in bank per book 7,400,000
Cash in bank per bank statement 8,180,000
Deposit in transit 1,200,000
Outstanding checks 1,300,000
Note collected by bank for the entity, including interest of P100,000 1,100,000
Service charge for December 20,000
DAIF checks of customers returned by bank 500,000
Error in recording a check in the book. The correct amount as paid by the bank is
P100,000 instead of P200,000 as recorded in the book. 100,000

Prepare a bank reconciliation for the month of December.

V. The cash account of Manalo Co. showed a ledger balance of P3,969.85 on June 30, 2020. The
bank
statement as of that date showed a balance of P4,150. Upon comparing the statement with the cash
records, the following facts were determined.
a. There were bank service charges for June of P25.
b. A bank memo stated that Espiritu’s note for P1,200 and interest of P36 had been collected on June
29, and the bank had made a charge of P5.50 on the collection. (No entry had been made on
Manalo’s books when Espiritu’s note was sent to the bank for collection.)
c. Receipts for June 30 for P3,390 were not deposited until July 2.
d. Checks outstanding on June 30 totaled P2,136.05.
e. The bank had charged the Manalo Co.’s account for a customer’s uncollectible check amounting
to P253.20 on June 29.
f. A customer ’s check for P90 had been entered as P60 in the cash receipts journal by Manalo on
June 15.
g. Check no. 742 in the amount of P491 had been entered in the cash journal as P419, and check no.
747 in the amount of P58.20 had been entered as P582. Both checks had been issued to pay for
purchases of equipment.

Prepare a bank reconciliation dated June 30, 2020, proceeding to a correct cash balance.

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MJ ESPIRITU