Quiz 1: Cash and Cash Equivalents 30 pts.

Instructions: Answer the problems below in a separate paper. You have 40 mins to finish the quiz. Write only what is
required in the problem.

Problem 1:

Grain Company's general ledger showed a balance of P2,205,600 in its “Cash” account on December 31, 2022.
Included in this balance are the following items:
DAIF checks from customers returned by the bank P 20,000
Savings account with BDO, earmarked for office
equipment due for delivery in January 2023 750,000
IOUs from employees 5,200
Undeposited checks from customers 10,000
Undeposited bills and coins received from customers 30,500
Cash in a sinking fund 500,000
Customers' checks dated January 2021 25,400
Travel advances 8,000
Traveler's checks 18,000

REQUIRED:
(a) Determine the total amount that should be included in the cash balance on December 31, 2022.
(b) Prepare entries to remove non-cash items from the entity's Cash account.

Problem 2
Prada Company established a petty cash fund to help ensure internal control over its small expenditures. The following
are the transactions affecting the petty cash fund for May 2022:
1. On May 2, the company established a petty cash fund for P8,000.

2.The petty cash custodian paid the following from May 2 through May 20:
Freight on merchandise purchases P2,500
Freight on merchandise sold 3,000
Supplies purchased 800
IOUs from employees 1,200

3. On May 18, the employees paid their IOUs as indicated above (the advances were granted on May 10; the
proceeds from the such collection were returned to the petty cash fund).

4. On May 20, the fund was replenished.

5. Payments from petty cash fund from May 20 through May 31 are as follows:
Freight on merchandise purchases P 1,200
Transportation of messenger 150
Medicines for employees 320
IOUs from employees 500

6. A count of the fund on May 31 revealed bills and coins in the petty cash fund amounting to P5,700.

The company's reporting period ends May 31.

REQUIRED:
Prepare journal entries for the above transactions, including any adjustments on May 31, 2022.