Problem 1

Columbia 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

The cash on hand included a customer postdated check of P150,000 and postal money order of P50,000.
The petty cash fund included unreplenished petty cash vouchers for P10,000 and an employee check for P5,000 dated January 31, 2021.
The BPI time deposit is set aside for acquisition of land to be made early in January 2021
The bond sinking fund is set aside for payment of bond payable due December 31, 2021

Required:
A. Prepare adjusting entries on December 31, 2020.
B. Compute for the total amount of cash and cash equivalents.
C. Explain the presentation of the items excluded from cash and cash equivalents.

A. Accounts Payable 150,000 B. Cash on hand 1,000,000

Cash on hand 150,000 -150,000
850,000
Petty Expenses 10,000
Receivable from employee Petty Cash Fund 50,000
Petty Cash Fund 10,000 Unreplenished PC expenses -10,000
Postdated employee check -5,000
Adjusted PCF 35,000

Cash on hand 850,000

C. BSP treasury bill - 120 days Separate Current Asset Petty Cash Fund 35,000
BPI time deposit - 90 days (set aside) Non-current asset Security Bank current account 2,000,000
Bond sinking fund Non-current asset PNB current account 1,500,000
Bond sinking fund 2,500,000
Total Cash and Cash Equivalents 6,885,000

Problem 2

Aurora Company reported the following information on December 31, 2020:

Cash on hand 1,000,000
Petty cash fund 50,000
Cash in bank 4,000,000
Saving deposit 2,000,000

Cash on hand included the following:

Customer check of P100,000 returned by the bank December 26, 2020 due to insufficient fund but subsequently redeposited and cleared by bank January 5, 2021
Customer check for P150,000 dated January 15, 2021 received December 22, 2020.
Postal money orders received from customers P200,000

The petty cash fund consisted of the following items:

Currency and coins 2,000
Employees’ IOUs 10,000
Currency in envelop marked collections for Christmas Party 5,000
Check drawn by Aurora payable to petty cashier 33,000
Check written and dated December 22, 2020 and delivered to payee on January 5, 2021, P200,000
Check written December 26, 2020 and dated January 31, 2021 delivered to payee on December 26, 2020, P300,000

Required:
A. Prepare adjusting entries on December 31, 2020
B. Compute the total cash on December 31, 2020
Cash on hand 1,000,000
A. Accounts Receivable 100,000 NSF Customer Check -100,000
Cash on hand 100,000 Postdated Customer Check -150,000
Adjusted cash on hand 750,000
Accounts Receivable 150,000
Cash on hand 150,000 Petty Cash Fund
Currency and coins 2,000
Advances to employees 10,000 Check drawn payable to petty cashier 33,000
Cash short/over 5,000 Petty Cash Fund 35,000
Petty Cash Fund 15,000
Cash in Bank 4,000,000
Cash in Bank 200,000 200,000
Accounts Payable 200,000 300,000
4,500,000
Cash in Bank 300,000
Accounts Payable 300,000
Cash on hand 750,000
Petty Cash Fund 35,000
Cash in Bank 4,500,000
Saving deposit 2,000,000
Total Cash 7,285,000