INTERMEDIATE ACCOUNTING 1– LONG-QUIZ (CASH AND CASH EQUIVALENTS)

NAME: DATE: SCORE:

INSTRUCTION. Using black or blue PERMANENT ink, write the summary of your final answer on the separate answer
sheet. AVOID ERASURES or ALTERATIONS.

Part 1: Test Classification

Required: Identify if the item is a cash, cash equivalent or other classification. Refer to the choices below:
C = Cash CCE)
CE = Cash Equivalent NCA = If classified as noncurrent asset
CA = If classified as current asset (other than

1. Postal money order

2. Bank drafts
3. Savings deposit (interest rate per annum: 0.0625%)
4. Payroll fund
5. Pension fund
6. Fund set aside for the acquisition of long-term assets scheduled within 12 months from the reporting period.
7. Sinking fund, related liability is payable within 3 months from the reporting period.
8. 3-month treasury bills
9. 12-month treasury notes acquired 10 months ago but will mature 2 months from the reporting period.
10. Compensating balance legally restricted for 3 months
11. Restricted deposit required by court of law for a pending case.
12. Certificate of deposits for the amount invested three months before maturity.

Part 2: Computations & Journal Entries

Problem 1
On November 1, 2024, COB Corporation established a petty cash fund amounting to P7,000 by issuing a check to a petty
cash custodian, which was eventually encased.
The following pertains to the transactions related to the petty cash fund:
Nov. 2-20 Paid the following from the petty cash fund: Postage– P3,500; Office supplies – P3,000 (all of
which were used by the entity during the month)
Nov. 21 Replenishment of the fund
Dec. 5-15 Petty Cash Vouchers for these dates are as follows: Payment for transportation expenses, P2,200;
Payment for Minor repairs & maintenance, P2,000
Jan. 5 IOUs from employees, P2,500
Jan. 10 Replenished the fund and increased it by P3,000
Requirement: Prepare the all the necessary journal entries in good form based on the foregoing information, under the
following methods: (Ignore explanations)
1) Fluctuating fund system. (6pts)
2) Imprest fund system. (6pts)

Problem 2
The petty cash fund of Guiguinto Company on December 31 is composed of the following:
Coins and currencies P14,000
Petty cash vouchers:
Gasoline payments 3,000
Supplies 1,000
Cash advances to employees 2,000
Employee’s check returned by bank marked NSF 5,000
Check drawn by the company payable to the order of the petty cash custodian, representing her 20,000
salary
A sheet of paper with names of employees together with contribution for a birthday gift of a co-
employee in the amount of 8,000
The petty cash ledger account has an imprest balance of P50,000.
3) What is the correct amount of petty cash on December 31?
a. P34,000 b. P39,000 c. P14,000 d. P42,000
4) The adjusting entry at December 31 would include a:
a. Debit to Cash of P16,000 c. Credit to Cash Short or Over of P5,000
b. Debit to Expenses of P11,000 d. Credit to Petty Cash Fund of P16,000

Problem 3
Baxia Corporation had the following account balances at December 31, 2020:
Current account at Bank A P3,500,000
Savings account at Bank B restricted for bonds payable due on June 30, 2021 1,300,000
Time deposit at Bank C 3,000,000
Current account at Bank A includes P800,000 of compensating balance against short-term borrowing arrangement at

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 INTERMEDIATE ACCOUNTING 1– LONG-QUIZ (CASH AND CASH EQUIVALENTS)
December 31, 2020. The compensating balance is legally restricted as to withdrawal by Baxia. A check of P700,000 dated
January 15, 2021 in payment of accounts payable was recorded and mailed on December 31, 2020.
5) The total amount to be reported as ‘cash’ as of December 31, 2020 is

Problem 4
The controller for Aiah Co. is attempting to determine the amount of cash and cash equivalents to be reported on its
December 31, 2020, balance sheet. The following information is provided.
 A bank overdraft of P110,000 has occurred at one of the banks the company uses to deposit its cash receipts. At
the present time, the company has no deposits at this bank. NO
 A separate cash fund in the amount of P1,500,000 is restricted for the retirement of long-term debt. NO
 Aiah has purchased P2,100,000 of commercial paper of Caleb Company. Which is due in 60 days. YES
 Aiah has received a check that is dated January 12, 2021, in the amount of P125,000. NO
 An I.O.U. from Angie Ventura, a company customer, in the amount of P150,000. NO
 Commercial savings account of P600,000 and a commercial checking account balance of P800,000 are held at
BDO of Pasay. In addition, Aiah has agreed to maintain a cash balance in another checking account of P500,000
at all times at BDO of Pasay to ensure future credit availability. YES
 Currency and coin on hand amounted to P7,700. YES
 Money market fund account held at Nyoy Co. (a mutual fund organization) permits Aiah to write checks on this
balance, P5,000,000. YES
 Petty cash fund of P1,000. Unreplenished expenses on the petty cash amounts to P400. YES
 The company has two certificates of deposit, each totaling P500,000. One of the CDs have a maturity of 75 days,
while the other has 120 days. YES 500K ONLY
 Travel advances of P180,000 for executive travel for the first quarter of next year (employee to reimburse through
salary reduction). NO
6) How much is the total amount to be reported as cash as of December 31, 2020?
7) How much is the total amount to be reported as cash equivalents as of December 31, 2020? 7,600,000

Problem 5
The following data pertain to Lincoln Corporation on December 31, 2020:
Current account at Bangko Diri P1,900,000
Current account at Bangko Didto (100,000)
Payroll account at Bangko Dinha 600,000
Foreign bank account (in equivalent pesos) 750,000
Savings account in a closed bank 150,000
Postage stamps 1,000
Employee’s post dated check 4,000
IOU from employees 10,000
Credit memo from a vendor for a purchase return 20,000
Traveler’s check 90,000
Money order 70,000
Sinking fund 2,000,000
DAIF check of customer 15,000
Customer’s check dated 1/1/21 80,000
Time deposit – 30 days 400,000
Money market placement (due 6/30/21) 500,000
Treasury bills, due 3/31/21 (purchased 12/31/20) 600,000
Treasury bills, due 1/31/21 (purchased 2/1/20) 300,000
8) How much is the total amount to be reported as cash as of December 31, 2020?
9) How much is the total amount to be reported as cash equivalents as of December 31, 2020?

Problem 6
In preparing its bank reconciliation on December 31, 2022, Shaun Company had made available the following information:
Balance per bank statement 390,750
Deposit In transit 50,000
Outstanding checks 76,500
Amount erroneously credited by bank to Shaun’s Account 8,000
Bank service charge for December 750
Check drawn, dated and recorded December 31, 2022, but
Not mailed until January 10, 2022 (included
In total outstanding checks above) 9,000
Check Shane Company charged by bank to the account of
Shaun Company 12,000
10) What is the amount shown as cash on Shaun’s December 31, 2022 statement of financial position?
11) What is the unadjusted cash in bank per books on December 31, 2022?
12) What is the net increase (decrease) in cash account as a result of adjustments?

Problem 7
In preparing its bank reconciliation on December 31, 2022, Shaun Company had made available the following information:
Balance per bank statement 390,750
Deposit In transit 50,000
Outstanding checks 76,500

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 INTERMEDIATE ACCOUNTING 1– LONG-QUIZ (CASH AND CASH EQUIVALENTS)
Amount erroneously credited by bank to Shaun’s Account 8,000
Bank service charge for December 750
Check drawn, dated and recorded December 31, 2022, but
Not mailed until January 10, 2022 (included
In total outstanding checks above) 9,000
Check Shane Company charged by bank to the account of
Shaun Company 12,000
13) What is the amount shown as cash on Shaun’s December 31, 2022 statement of financial position?
14) What is the unadjusted cash in bank per books on December 31, 2022?
15) What is the net increase (decrease) in cash account as a result of adjustments?
16) Journal Entry#1 Provide the adjusting entry(ies) on December 31, 2022 (2 points)

Problem 8
The review of bank reconciliation of J Inc. is shown below.
J Inc.
Bank Reconciliation
December 31, 2022
Balance per ledger P35,000
Add: Collections received on the last day of December and charged to
“Cash in Bank” on books but not deposited 7,100
Debit memo for customer’s NSF checks (check is on hand but no
Entry has been made on the books) 2,000
Debit memo for bank service charge for December 900
Deduct: Outstanding checks (see details below) P 19,300
Credit memo for proceeds of a note receivable which
Had been left at the bank for collection but
Which has not been recorded as collected 6,900
Check for an account payable entered in the books as
P9,800 but drawn and paid by the
bank as P13,000 3,200 29,400
Computed balance P 15,600
Unallocated difference 36,600
Balance per bank (check confirmation) 50,000

List of Outstanding Checks

December 31, 2022
Check No. Amount
1000 P6,800
1001 1,200
1002 2,500
1003 3,000
1004 3,800
1005 4,000
Total P19,300
17) How much is the correct outstanding checks at December 31, 2022?
18) How much is the adjusted cash balance at December 31, 2022?
19) Journal Entry#2 Provide the adjusting entry(ies) on December 31, 2022 (4 points)
Problem 9
The following data are gathered by the accountant of the Sablay Company:
Nov. 30, 2021 Dec. 31, 2021
Cash account balance P ? P87,400
Bank statement balance 260,000 ?
Deposit in transit 20,500 32,200
Outstanding Checks 69,000 75,000
Bank service charges 1,500 1,300
NSF Check 20,600*
Company’s notes receivable collected by the bank 160,000 211,100
*Redeposited in the same month. No entries made to take up the return and redeposit.
The bank statement and the company’s cash records show the following totals:
Cancelled checks and debit memos per bank statement P540,000
Cash receipts per cash book 400,000
Checks written per cash book 524,100
Deposits and credit memos per bank statement 620,000

20) What is the total book receipts in December (unadjusted)?

21) What is the total book disbursements in December (unadjusted)?

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22) How much is the adjusted book balance as of December 31, 2021?
23) How much is the balance of the cash account (unadjusted) as of November 30, 2021?
24) How much is the balance per bank statement as of December 31, 2021?

Problem 10
In reconciling the Cash in bank of Inner Company with the bank statement balance for the month of November 2022, the
following data are summarized:
Total book receipts - November P900,000
Bank receipt - November 1,000,000
Credit memo for note collection:
October 65,000
November 75,000
Credit memo for November bank loan 100,000
Deposit in transit for October 125,000
Erroneous bank credit for November 25,000
Erroneous bank credit for October corrected by bank in November 50,000
Erroneous book credit during November 5,000
Erroneous book credit during October corrected by the Company during November 10,000
Debit memo for service charge - October 10,000
Debit memo for service charge – November 8,000
Erroneous book debit – November 20,000
Erroneous bank debit – November 65,000
Book disbursement – November 500,000
Bank disbursement – November 600,000
Outstanding check – October 84,000
Adjusted cash balance as of November 2022 is P2,500,000.
25) What is the amount of outstanding checks for November?
26) How much is the deposit in transit for the month of November?
27) What is the adjusted amount of receipt for the month of November?
28) What is the adjusted amount of disbursement for the month of November?
29) How much is the adjusted cash balance in October?
30) How much is the unadjusted book balance in October?
31) How much is the unadjusted book balance in November?
32) How much is the unadjusted bank balance in October?
33) How much is the unadjusted bank balance in November?
34) Assuming instead that the actual outstanding checks amounts to P50,000, how much is the cash shortage (overage)?

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