Cash and Cash Equivalents Sample Problems

1. The statement of financial position of Kwarta Company shows cash of 330,820. The following items
were found to comprise this total amount:

Checking account in Metrobank (outstanding checks as of

year-end totaled 15,200) 105,200.00
Savings account is Far East bank 30,800.00
Petty cash fund (including expense receipts for 250) 1,500.00
Cash on hand (undeposited sales receipts) 4,200.00
Sinking fund cash 35,000.00
Cash in foreign bank (in equivalent pesos) 65,000.00
Customers' check on hand
Traveler's Check 14,000.00
Manager's Check 23,120.00
Short term treasury bills 52,000.00

What is the correct amount of cash?

2. Kuton Companys checkbook balance at December 31, 2012 was 180,000. In addition, Kuton held
the following items in its safe on that date:
Check payable to Kuton dated January 2, 2013 in payment of a sale made in December
2012, included in December 31 checkbook balance- 65,000.
Check payable to Kuton deposited December 15, but returned by the bank DAIF- 20,000.
Check drawn on Kutons account, payable to a vendor, dated and recorded on December
30 but not yet mailed to payee as of December 31, 2012- 15,000.

What is the correct cash balance of the company?

3. Green Companys general ledger showed a balance of 2,205,600 in its cash account on December
31, 2012. Included in this balance are the following items:

DAIF checks returned by bank 20,000.00

Savings account 750,000.00
IOUs 1,200.00
Postage stamps 600.00
Bank draft 10,000.00
Cash on hand 30,000.00
Cash sinking fund 500,000.00
 Customer's checks dated January 2013 5,400.00
Travel advances 4,000.00
Traveler's Checks 8,000.00

What is the correct balance of cash?

4. Jennifer Incorporated established a petty cash fund of 5,000 for incidental expenses on June 1,
2012. At the end of the month, the count of cash on hand indicated that 670.40 remained in the
fund. A review of the petty cash vouchers disclosed the following expenses had been incurred
during the month:

Office supplies 341.60

Transportation 1,321.40
Postage 780.00
Miscellaneous 837.60
Representation 1,000.00

What is the amount of cash shortage?

Prepare the adjusting entry for the end of the month.

5. In your cash count of the petty cash fund of Canyon Company as of July 4, 2012, you found the
following composition of its petty cash fund:

Bills and coins counted 2,450.00

Approved and signed petty cash vouchers
Dated June 2012 3,300.00
Dated July 1-4, 2012 800.00
IOU from Joe Santos, an employee 1,400.00
A check drawn by Juvy Victoria, an employee, dated July 15,
2012 2,000.00

The petty cash fund has an imprest balance of 10,000. The companys reporting period ends on
June 30.

What is the correct balance of the petty cash fund?

How much is the cash shortage or overage?
Prepare the adjusting entry for June 2012
6. You are attempting to determine an apparent cash shortage that you believe resulted from an
employees theft. You have assembled the following information for the month of March:

Cash balance per books, March 1 115,963.70

Cash receipts for March per books 246,475.00
Cash disbursements for March per books 334,709.10
Cash balance per bank statement, March 31 15,341.40
Deposit in transit, March 31 9,000.00
Outstanding checks, March 31 2,703.80
Bank service charge for March 92.00

What is the amount of cash shortage?

7. In reconciling the book and bank balance of the cash account of Perlas Corporation, you discover
the following for the month of December 2012:

Balance per bank statement 400,000.00

Balance per books 387,000.00
Receipts not yet deposited 100,000.00
Bank service charge 1,000.00
Customer's check returned by bank marked
DAIF 22,000.00

A paid check for 40,000 was recorded in the cash book as 4,000.

Assuming no other errors were noted, what is the amount of the outstanding checks at December
31, 2012?
8. The following data related to Jennifer Services Incorporated were gathered:

30-Nov-12 31-Dec-12
Balance per books 270,311.00
Balance per bank statement 294,771.00 148,986.00
Receipts not yet deposited 21,270.00 32,925.00
Outstanding checks 40,525.00 35,191.50
Bank service charges 295.00 158.00
Interest credit by bank 5,500.00 4,925.00

Other information:
Receipts and disbursements per books during December are P1,072,850 and P1,195,536.50,
respectively.
Total credits reflected in the bank statement amounted to P1,065,620.
Check #137412 for P2,300 recorded by depositor as P3,200 in error.
Customer check for P5,947 deposited on December 28, 2012 was found to be uncollectible.
Interest for P625 chargeable to Jennyfer Services was erroneously charged by the bank to
the company.
No sufficient fund checks in the amount of P5,000 was returned by the bank and redeposited
by the company during December. No entry was made on the books for the return or
redeposit.

Prepare a proof of cash.

1. Leona Company had the following account balances on December 31, 2011:
Cash in Bank- current account 4,000,000.00
Cash in Bank- payroll account 1,500,000.00
Cash on Hand 500,000.00
Cash in Bank- restricted for equipment acquisition on 2012 1,000,000.00
Treasury bill purchased November 1, 2011 to mature on February 1,
2012 2,000,000.00

The cash on hand includes a P 200,000 customer check payable to Leona Company,
dated January 15, 2012. What should be reported as cash and cash equivalents on
December 31, 2011?
a. P 9,000,000 c. P 8,800,000
b. P 7,800,000 d. P 5,800,000

2. On December 31, 2011, Tigres Company had the following cash balances:
Cash in Bank 5,000,000.00
Petty Cash Fund 50,000.00
Time Deposit, one year, due March 1,
2012 1,000,000.00
Saving Deposit 500,000.00

A check of P 100,000 dated January 15, 2012 in payment of accounts payable was
recorded and mailed on December 28, 2011. How much cash and cash equivalents
should be reported on December 31, 2011?
a. P 6,550,000 c. P 5,650,000
b. P 6,650,000 d. P 5,450,000

3. The cash account in Jen Companys ledger on December 31, 2011 showed a balance
of P 5,250,000 which included the following:
Petty Cash Fund 50,000.00
 Undeposited receipts, including a post-dated customer
check of P200,000 1,300,000.00
Cash in Bank 2,500,000.00
Cash in Sinking Fund 1,000,000.00
Expenses paid out of collections, not yet recorded 250,000.00
IOUs signed by employees 150,000.00
5,250,000.00

At what amount should Jen Company report as cash in the December 31, 2011
statement of financial position?
a. P 3,650,000 c. P 4,650,000
b. P 3,850,000 d. P 4,050,000

4. Enipr Company had the following account balances at December 31, 2011:
Cash on Hand and in Bank 5,000,000.00
Cash restricted for bond payable due on June 30, 2013 2,000,000.00
Time Deposit 6,000,000.00
Saving deposit set aside for dividend payable on June 30, 2012 1,000,000.00

In the December 31, 2011 statement of financial position, what total amount should be
reported as cash and cash equivalents?
a. P 12,000,000 c. P 11,000,000
b. P 14,000,000 d. P 13,000,000

5. On April 1, Jennifer Company established an imprest system petty cash fund for P 10,000 by
writing a check drawn against the general checking account. On April 30, the fund
contained the following:
Currency and coins 3,000.00
Receipts for office supplies 4,000.00
Receipts for postage still unused 2,000.00
Receipts for transportation 600.00

On April 30, the entity wrote a check to replenish the fund. What is the amount of
replenishment under the imprest fund system?
a. P 10,000 c. P 7,000
b. P 6,600 d. P 3,000

6. During the audit of Maganda Company on December 31, 2011, the following data are
gathered:
Balance per book 4,000,000.00
Bank charges 10,000.00
Outstanding checks 950,000.00
Deposit in transit 1,200,000.00
Customer note collected by bank 1,500,000.00
Interest on customer note 60,000.00
Customer check returned NSF 250,000.00
Depositor's note charged to
account 1,000,000.00

The correct cash balance amounts to ____.

a. P 4,300,000 c. P 4,250,000
b. P 5,300,000 d. P 4,000,000