Intermediate Accounting 1 – Practice Quiz

Problem 1. Tranvia Company revealed the following information on December 31, 2019:
Cash in checking account 350,000
Cash in money market 750,000
Treasury bill, purchased November 1, 2019 3,500,000
Time deposit purchased Decemebr 31, 2019 maturing 4,000,000
March 31, 2020
What amount should be reported as cash and cash equivalents on December 31, 2019?
a. 1,100,000
b. 3,850,000
c. 4,600,000
d. 8,600,000

Solution:
Cash in checking account 350,000
Cash in money market account 750,000
Treasury bill, purchased November 1, 2019
maturing Jan.31,2020 3,500,000
4,600,000

Problem 2. 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 used 5,000
Certificate of time deposit 1,500,000
Money order 50,000
Manager check 100,000
Traveler check 1,000,000
Postdated customer check 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

Solution:
Cash in bank-demand deposit 5,000,000
Cash on hand 400,000
Money order 50,000
Manager check 100,000
Traveler check 1,000,000
Postdated customer check 500,000
7,050,000
Problem 3. Thor Company provided the following data on December 31, 2019:
Chackbook 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, 2019 but not mailed until
January 31, 2020 500,000
Cash in sinking fund 2,000,000
On December 31,2019, 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

Solution:
Checkbook balance 4,000,000
Check drawn on Thor’s account 500,000
4,500,000

Problem 4. Joana Company had the following account balances on December 31, 2019:
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 500,000
to be disbursed in early 2020
Cash in sinking fund set aside for bond payable due June 30, 2020 1,500,000

The petty cash fund included unreplenished December 2019 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, 2020.
What total amount should be reported as cash and cash equivalents on December 1, 2019?
a. 6,940,000
b. 8,940,000
c. 7,940,000
d. 7,440,000

Solution
Petty cash fund (50,000-10,000) 40,000
Cash on hand (500,000-100,000) 400,000
Cash in bank- current account 4,000,000
Cash in bank- payroll account 1,000,000
Time deposit 2,000,000
7,440,000
Problem 5. Baloney Company had the following account balances on December 31, 2019:
Cash in bank 2,250,000
Cash on hand 125,000
Cash restricted for addition to plant in 2020 1,600,000
Cash in bank included P600,000 of comensating balance against short-term borrowing
arrangement.
The comensating balance is not legally restricted as to withdrawal.
What amount should be reported as cash on December 31, 2019?
a. 1,775,000
b. 2,250,000
c. 2,375,000
d. 3,975,000

Solution:
Cash in bank 2,250,000
Cash on hand 125,000
2,375,000

Problem 6. On Decemeber 31, 2019, Lamentable Company had the following cash balances:
Cash in bank- current account 6,000,000
Petty cash fund (all funds were reimburesed at year-end) 50,000
Time deposit- three months, due January 15, 2020 2,500,000
Saving deposit 1,000,000
Cash in bank included P400,000 of compensating balance against short term borrowing
arrangement.
The compensating balance is 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

Solution:
Cash in bank- current account (6,000,000- 400,000) 5,600,000
Petty cash fund 50,000
Time deposit 2,500,000
Saving deposit 1,000,000
9,150,000

Problem 7. 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
Repairs 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

Solution:
Coins and currency 22,000

Check drawn payable to the order of Ann Cruz, petty cash

custodian representing her salary 15,000
37,000

Problem 8. Asmirable 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
Employees’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

Solution:
Coins and currency 2,000
Check drawn to the order of petty cash custodian 4,000
6,000

Problem 9. Love Company reported the following information in relation to cash on December
31, 2019:
 Checkbook balance, P4,000,000
 Undeposited collections, P400,000
 A customer check amounting to P200,000 dated January 2, 2020 was included in the
December 31, 2019 checkbook balance
  Another customer check for P500,000 deposited on December 22, 2019 was included in
the checkbook balance but returned by the bank for insufficiency of fund
This check was redeposited on December 26,2019 and cleared two days later.
 A P400,000 check payable to supplier dated and recorded on December 30,2019 was
mailed on January 16, 2020
 A petty cash fund of P50,000 comprised the following on December 31, 2019:
Coins and currency 5,000
Petty cash vouchers 40,000
Refundable deposit for returnable cointainers 5,000
50,000

A check of P40,000 was drawn on December 31, 2019 payable to Petty Cash.

What is the adjusted cash in bank on December 31, 2019?

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

Solution:
Checkbook balance 4,000,000
Postdated customer check (200,000)
Undelivered check payable to supplier 400,000
Adjusted Cash in bank 4,200,000
What total amount should be reported as cash on December 31, 2019?
a. 4,645,000
b. 4,845,000
c. 4,600,000
d. 4,650,000

Solution:
Checkbook balance 4,000,000
Postdated customer check (200,000)
Undelivered check payable to supplier 400,000
4,200,000
Petty Cash:
Coins and currencies 5,000
Replenishment check 40,000
Undeposited collections 400,000 445,000
4,645,000

Problem 10. Laconic Company received the bank statement for the month of April which
included the following information:

Bank service charge for April 15,000

Check deposited by Laconic during April was not collectible
And has been marked “NSF” by the bank and returned 40,000
Deposits made but not yet recorded by bank 130,000
Checks written and mailed but not yet recorded by bank 100,000

The entity found a customer check dor O35,000 payable to the entity that had not yet been
deposited and had not been recorded.
The general ledger showed a bank account balance of P920,000.
What amount should be reported as adjusted cash in bank on April 30?
a. 900,000
b. 865,000
c. 930,000
d. 965,000

Solutions:
Balance per leger 920,000
Unrecorded customer check 35,000
Bank service charge (15,000)
NSF check (40,000)
900,000

Problem 11. Sapphire Company provided the following information for the month of December:

Balance per bank statement December 31 2,800,000

Bank service charge for December 12,000
Interest paid by bank to Sapphire Company for December 10,000
Deposits made but not yet recorded by the bank 350,000
Checks written but not yet recorded by the bank 650,000

The entity discovered that it had not drawn and erronously recorded a check for P46,000 that
should have been recorded for P64,00.
What is the cash balance per ledger on December 31?
a. 2,500,000
b. 2,520,000
c. 2,540,000
d. 2,800,000

Solutions:
Balance per bank 2,800,000
Deposits in transit 350,000
Outstanding checks (650,000)
Adjusted bank balance 2,500,000
Balance per ledger (SQUEEZE) 2,520,000
Interest income 10,000
Service charge (12,000)
Book error (64,000-46,000) (18,000)
Adjusted book balance 2,500,000

Problem 12. Timex Company provided the following data relating to the cash transactions and
bank account for the month of July:
Cash balance per ledger ?
Cash balance per bank statement ?
Deposit of July 31 not recorded by bank until August 1 450,000
Outstanding checks, including certified check of P50,000 750,000
Proceeds of bank loan not recorded in ledger 500,000
Proceeds from customer note, face P400,000 435,000
collected by bank, collection fee of P15,000
A creditor check had been entered in the book as P20,000 and
was erronously deducted by bank marked DAIF 200,000
A customer check was returned by bank marked DAIF 50,000
Correct cash balance 3,000,000

1. What is the cash balance per ledger?

a. 2,120,000
b. 3,055,000
c. 2,555,000
d. 2,065,000

Solutions:
Balance per ledger (SUEEZE) 2,120,000
Credit memos 935,000
Debit memos (5,000)
(50,000)
3,000,000
2. What is the cash balance per bank statement?
a. 3,700,000
b. 3,070,000
c. 3,050,000
d. 2,370,000

Solutions:
Balance per bank(SQUEEZE) 3,070,000
Deposit in transit 450,000
Outstanding check (700,000)
Error 180,000
3,000,000

Problem 13. Jane company provided the following information at moth-end:

Cash in bank per bank statement 8,000,000

Deposit in transit 1,200,000
Outstanding checks, including certified check 1,500,000
Of P200,000
Amount erronously credited by bank to Jane’s account 150,000
Note collected by bank for Jane Company, including 1,100,000
Interest of P100,000
Service charge for the current month 20,000
NSF 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
Saving deposit in other bank closed by BSP 1,000,000
Currency and coins on hand 900,000
Petty cash fund 50,000
 1. What is the adjusted cash in bank at month-end?
a. 7,750,000
b. 7,900,000
c. 8,050,000
d. 7,550,000
2. What is the unadjusted cash in bank per ledger at month-end?
a. 7,070,000
b. 7,220,000
c. 7,270,000
d. 7,750,000
3. What total amount of cash should be reported as current asset?
a. 8,700,000
b. 9,700,000
c. 8,020,000
d. 8,850,000

Problem 14. Humanizer Company provided the following information:

Balance per bank statement – May 31 2,600,000

Deposits outstanding 300,000
Checks outstanding (100,000)
Correct bank balance- May 31 2,800,000

Balance per book- May 31 2,810,000

Bank service charge (10,000)
Correct book balance- May 31 2,800,000

June data are as follows: Bank Book

Checks recorded 2,220,000 2,500,000
Deposits recorded 1,600,000 1,800,000
Service charges recorded 50,000
Note collected by bank, P500,000 plus interest 550,000
NSF check returned with June 30 statement 100,000
Balances 2,400,000 2,100,000

1. What is the amount of outstanding checks on June 30?

a. 300,000
b. 400,000
c. 200,000
d. 100,000

Solutions:
Checks outstanding- May 31 100,000
Checks Recorded- Book 2,500,000
Checks Recorded-Bank (2,200,000)
400,000
2. What is the amount of deposits in transit on June 30?
a. 300,000
 b. 100,000
c. 200,000
d. 500,000

Solutions:
Deposits outstanding- May 31 300,000
Deposits recorded- Book 1,800,000
Deposits recorded-Bank (1,600,000)
500,000
3. What is the adjusted cash in bank on June 30?
a. 2,500,000
b. 2,400,000
c. 2,100,000
d. 2,800,000

Solutions:
Bank balance- May 31 2,800,000
Book balance- June 2,100,000
Balances – June (2,400,000)
2,500,000

Problem 15. Cool Company prepared the following bank reconciliation for the month of
November:
Balance per bank statement, November 30 3,600,000
Add: Deposit in transit 800,000
4,400,000
Less: Outstanding checks 1,200,000
Bank credit recorded in error 200,000 1,400,000
Balance per book, November 30 3,000,000

Data per bank statement for the month of December:

December deposits, including note receivable collected of
P1,000,000 for Cool Company 5,500,000
December disbursements, including NSF check
P350,000 and service charge P50,000 4,400,000

All items that were outstanding on November 30 cleared through the bank in December,
including the bank credit.
In addition, checks of P500,000 were outstanding and deposits of P700,000 were in transit on
December 31.
1. What is the adjusted cash in bank on December 31?
a. 4,700,000
b. 4,900,000
c. 4,500,000
d. 3,200,000

Solutions:
5,500,000
3,600,000
(4,400,000)
700,000
(500,000)
 4,900,000

2. What is the balance of cash per ledger on December 31?

a. 4,100,000
b. 4,900,000
c. 4,700,000
d. 4,300,000

Solution:
1,000,000 4,900,000
(400,000) (600,000)
600,000 4,300,000
3. What is the amount of cash receipts per book in December?
a. 5,400,000
b. 4,400,000
c. 5,500,000
d. 6,400,000

Solution:
5,500,00
(1,000,000)
(800,000)
700,000
4,400,000
4. What is the amount of cash disbursements per book in December?
a. 3,700,000
b. 3,300,000
c. 3,100,000
d. 3,500,000

Solution:
4,400,000
(400,000)
(1,400,000)
500,000
3,100,000

Problem 16. Valiant Company reported the following analysis of current receivables at year-
end:
Trade accounts receivable 2,000,000
Allowance for doubtful accounts (100,000)
Claim against shipper for goods lost in transit in November 300,000
Selling price of unsold goods sent by Valiant on consignment
At 150% of cost and not included in ending inventory 600,000
Security deposit on lease of warehouse 200,000
TOTAL 3,000,000
What total amount should be reported as current trade and other receivables?
a. 2,200,000
b. 2,400,000
c. 2,300,000
d. 3,000,000

Solution:
Trade accounts receivables 2,000,000
Allowance for doubtful accounts (100,000)
Claim against shipper for goods lost 300,000
 2,200,000
Problem 17. Jinx Company provided the following information for the current year in relation to
accounts receivable:
Accounts receivable, January 1 1,300,000
Credit sales 5,500,000
Sales return 150,000
Accounts written off 100,000
Collections from customers 5,000,000
Estimated future sales return on December 31 50,000
Estimated uncollectible accounts per aging at year-end? 250,000

What amount should be reported as net realizable value of accounts receivable on December 31?
a. 1,550,000
b. 1,250,000
c. 1,300,000
d. 1,500,000

Solution:
Accounts receivable- Jan. 1 1,300,000
Credit sales 5,500,000
6,800,000
Less: Sales Return 150,000
Accounts written off 100,000
Collection from customer 5,000,000
Accounts Receivable- Dec.31 1,550,000
Less:Allowance for doubtful accounts 250,000
Allowance for sales return 50,000
NET REALIZABLE VALUE 1,250,000

Problem 18. Rapture Company had the following information for the current year relating to
accounts receivable:
Accounts receivable, January 1 1,300,000
Credit sales 5,400,000
Collections from customers, excluding recovery 4,750,000
Accounts written off 125,000
Collection of accounts written off in prior year, 25,000
customer credit was not reestablished
Estimated uncollectible receivables per aging at 165,000
December 31
What is the balance of accounts receivable, before allowance for doubtful accounts, on
December 31?
a. 1,825,000
b. 1,850,000
c. 1,950,000
d. 1,990,000

Solution:
Accounts receivable- Jan. 1 1,300,000
Credit sales 5,400,000
 6,700,000
Less: collections from customer (4,750,000)
Accounts written off (125,000)
1,825,000

Problem 19. Namesake Company reported the following unadjusted balances at year-end:
Debit Credit
Accounts receivable 3,000,000
Allowance for doubtful accounts 10,000
Net credit sales 8,000,00

The entity estimated that 3% of the gross accounts receivable would become uncollectible.
What amount should be reported as doubtful accounts expense for the current year?
a. 240,000
b. 100,000
c. 90,000
d. 80,000

Solution:
Required allowance balance 90,000
Add: debit balance in allowance 10,000
DOUBTFUL ACCOUNTS EXPENSE 100,000

Problem 20. Bestial Company reported the following accounts at year-end before adjustments:
Debit Credit
Allowance for doubtful accounts 5,000
Sales 7,200,000
Sales return 200,000

The entity estimated uncollectible accounts receivable at 2% of net sales.

What amount of doubtful accounts expense should be reported for the current year?
a. 140,000
b. 145,000
c. 141,000
d. 144,000

Solution:
7,200,000-200,000x 12%= 140,000