Exercise 1

On
December
31, 2020,
Albania
Company
provided the
following
data:
Cash in bank 3,000,000
Time deposit — 30 days 1,000,000
Money market placement due on June 30, 2021 2,000,000
Saving deposit in closed bank 100,000
Sinking fund for bond payable due June 30, 2022 1,500,000
Petty cash fund 20,000

 The cash
in bank
included
customer
check of
P200,000
outstandin
g for 18
months.
 Check of
P250,000
in payment
of
accounts
payable
was dated
and
recorded
on
December
31, 2020
but mailed
to
creditors
 on January
15, 2021.
 Check of
P100,000
dated
January
31, 2021 in
payment of
accounts
payable
was
recorded
and mailed
December
31, 2020.
 The
reporting
period is
the
calendar
year.

The cash
receipts
journal
was held
open
until
January
15, 2021
during
which
time an
amount of
P450,000
was
collected
and
recorded
on
December
31, 2020.
Required:

1.Prepare
adjustin
g
entries
on
Decemb
er 31,
2020.
2.Compute
the total
amount
of cash
and cash
equivale
nts that
should
be
reported
on
Decemb
er 31,
2020.
3.Explain
the
presentat
ion of
the items
excluded
from
cash and
cash
equivale
nts.