MCP in INTERMEDIATE ACCOUNTING

CASH AND CASH EQUIVALENTS

1. Tranvia Company revealed the following information on December 31, 2017:

Cash in checking account 350,000

Cash in money market account 750,000
Treasury bill, purchased November 1, 2017 maturing January 31, 2018 3,500,000
Time deposit purchased December 1, 2017 maturing March 31, 2018 4,000,000

What amount should be reported as cash and cash equivalents on December 31, 2017?
A. 1,100,000
B. 3,850,000
C. 4,600,000
D. 8,600,000

2. Dahlia Company had the following account balances on December 31, 2017:

Cash on hand and in bank 3,000,000

Cash legally restricted for addition to plant expected to be disbursed in 2018 2,000,000
Bank certificate of deposit due February 1, 2018 purchased September 1, 2017 1,000,000

What amount should be reported as cash and cash equivalents on December 31, 2017?
A. 3,000,000
B. 5,000,000
C. 6,000,000
D. 4,000,000

3. Abigail Company provided the following information at year-end:

Cash on hand 500,000

Cash in bank 4,000,000
Petty cash fund 50,000
Commercial paper with maturity of 2 months 1,000,000
Treasury bill with maturity of 6 months 2,000,000
Postdated customer checks 200,000

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

A. 7,550,000
B. 5,550,000
C. 4,550,000
D. 5,750,000

4. Affable Company provided the following information at year-end comprising the cash accounts:

Cash in bank – demand deposit account 5,000,000

Cash on hand 400,000
Postage stamps unused 5,000
Certificate of time deposit with maturity of 3 months 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

5. Thor Company provided the following data on December 31, 2017:

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 31,2017 but not mailed until January 31,2018 500,000
Cash in sinking fund 2,000,000

On December 31, 2017, what amount should be reported as “cash” under current assets?
A. 4,500,000
B. 5,500,000

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C. 3,500,000
D. 6,500,000

6. Joanna Company had the following account balances on December 31, 2017:

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 2018 500,000
Cash in sinking fund set aside for bond payable due June 30, 2018 1,500,000

The petty cash fund included unreplenished December 2017 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, 2018.

What total amount should be reported as cash and cash equivalents on December 31, 2017?
A. 6,940,000
B. 8,940,000
C. 7,940,000
D. 7,440,000

7. At year-end, Rabid Company reported a cash balance of P5,250,000 which included the following:

Petty cash fund 50,000

Undeposited receipts, including a postdated customer check of P200,000 1,300,000
Cash in bank 2,500,000
Cash in sinking fund 1,000,000
Vouchers paid out of collection, not yet recorded 250,000
IOU’s signed by employees 150,000
Total 5,250,000

What total amount should be reported as “cash” in the statement of financial position at year-end?
A. 3,650,000
B. 3,850,000
C. 4,650,000
D. 4,050,000

8. On December 31, 2017, Kibitzer Company had the following balances in the bank accounts it maintains at First Bank:

Checking account # 101 1,750,000

Checking account # 201 ( 100,000)
Time deposit account – 30 days 250,000
90-day Treasury bill, due February 28, 2018 500,000
180-day Treasury bill, due March 15, 2018 800,000
On December 31, 2017, what total amount should be reported as cash and cash equivalents?
A. 1,900,000
B. 2,000,000
C. 2,400,000
D. 3,200,000

9. Aruba Company had a checkbook balance on December 31, 2017 of P8,000,000 and held the following items in the
safe:

Check payable to Aruba, dated January 5, 2018 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, 2018, and cleared January 3, 2018. 500,000
Check drawn on Aruba’s account and payable to a vendor, dated and recorded December 31 but not
mailed until January 15, 2018 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

What total amount should be reported as cash on December 31, 2017?

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 MCP in INTERMEDIATE ACCOUNTING
A. 7,400,000
B. 7,440,000
C. 8,440,000
D. 7,450,000

10. Using the above information, what total amount should be reported as cash equivalents on December 31, 2017?
A. 6,500,000
B. 3,000,000
C. 5,500,000
D. 2,500,000

11. On December 31, 2017. Lamentable Company had the following cash balances:

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, 2018 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

12. Baloney Company had the following account balances on December 31, 2017:

Cash in bank 2,250,000

Cash on hand 125,000
Cash restricted for addition to plant in 2018 1,600,000

Cash in bank included P600,000 of compensating balances against short-term borrowing arrangement. The
compensating balance is not legally restricted as to withdrawal.

What total amount should be reported as “cash” on December 31, 2017?

A. 1,775,000
B. 2,250,000
C. 2,375,000
D. 3,975,000

13. Kindred Company had the following account balances on December 31, 2017.

Petty cash fund 50,000

Cash in bank – current account 4,000,000
Cash in bank – sinking fund 2,000,000
Cash on hand 500,000
Money market placement with maturity of 3 months 1,000,000

The cash on hand included a P100,000 check payable to Kindred Company dated January 15, 2018. In exchange for a
guaranteed line of credit, the entity has agreed to maintain a minimum balance of P200,000 in the unrestricted current
bank account.

What the total amount should be reported as “cash” on December 31, 2017?
A. 6,450,000
B. 4,450,000
C. 7,450,000
D. 6,250,000

14. Takeable Company had the following account balances on December 31, 2017:

Cash on hand and in bank 5,000,000

Cash restricted for equipment acquisition in early next year 2,000,000
Time deposit 1,500,000
Saving deposit set aside for dividend payable on December 31, 2018 1,000,000

What total amount should be reported as “cash” on December 31, 2017?

A. 7,500,000
B. 9,500,000

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C. 6,000,000
D. 8,000,000

15. Ecstacy 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 the result, the shares are very actively traded in the market.
 Investment securities of P2,000,000. These securities are government treasury bills. 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 coin, currency, saving account and checking account.
 Investments securities of P1,500,000. These securities are commercial papers or money market placements.
The term of the commercial papers is nine months and they were purchased on December 31 at which time
they had three months to go until they mature.

What total amount should 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

16. Using the above information, what total amount should be reported as cash equivalents at the end of current year?
A. 3,500,000
B. 4,500,000
C. 1,500,000
D. 2,500,000

17. Candid Company provided the following information with respect to cash and cash equivalents at year-end?

Checking accounts at First Bank (200,000)

Checking accounts at Second Bank 5,500,000
Treasury bonds 1,000,000
Unrestricted foreign bank account in equivalent pesos 2,000,000
Cash in foreign bank restricted due to exchange control 1,000,000
IOU from president 750,000
Credit memo from a vendor for a purchase return 80,000
No sufficient fund costumer check 150,000
Petty cash fund, P20,000 in currency and expense receipts for P30,000 50,000

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

A. 5,520,000
B. 7,500,000
C. 7,550,000
D. 7,520,000

18. On December 31. 2017, Roma Company reported cash of P3,350,000 with the following details:

Undeposited collections 60,000

Cash in bank – BDO checking account 500,000
Cash in bank – PNB (overdraft) (50,000)
Undeposited NSF check received from costumer, dated December 1, 2017 15,000
Undeposited check from a costumer, dated January 15, 2018 25,000
Cash in bank – BDO fund for payroll 150,000
Cash in bank – BDO saving deposit 100,000
Cash in bank – BDO money market instrument. 90 days 2,000,000
Cash in bank – BDO value added tax account 450,000
Cash in foreign bank restricted 100,000
Total 3,350,000

On December 31,2017, what total amount should be reported as cash and cash equivalents?
A. 2,910,000
B. 2,810,000
C. 2,760,000
D. 3,260,000

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 MCP in INTERMEDIATE ACCOUNTING
19. 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 3,000
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

20. 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. 10,000
B. 7,000
C. 6,000
D. 9,000

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