DO IT YOURSELF:

Problem 1

Calinan Corporation’s financial statements, December 31, 2017, reveal the following:

1. Current account at BPI P (50,000)

2. Current account at BDO 40,0000
3. Treasury bills (acquire 3 months before maturity) 150,000
4. Treasury bills (maturity date is 12/31/17) 300,000
5. Cash in bank – payroll account 90,000
6. Cash in bank- restricted account for building 500,000
7. Time deposit, purchased 12/15/17 and due on 3/15/18 80,000
8. Postdated customer checks 10,000
9. Certificate of deposit 35,000
10. Money order 20,000
11. Manager’s check 20,500
12. Employee’s check marked “DAIF” 8,000
13. Petty Cash Fund- all funds were reimbursed on
15,000
12/31/17

Question: How much is the Cash and Cash Equivalents on December 31,2017?
Answer:

1. Current account at BDO 40,0000

2. Treasury bills (acquire 3 months before maturity) 150,000
3. Cash in bank – payroll account 90,000
4. Time deposit, purchased 12/15/17 and due on 3/15/18 80,000
5. Certificate of deposit 35,000
6. Money order 20,000
7. Manager’s check 20,500
8. Petty Cash Fund- all funds were reimbursed on
15,000
12/31/17
Total P450,500
Problem 2

The “Cash and Cash Equivalents” account of Madam Corporation’s ledger on

December 31, 2016 showed the following:

1. Current Account First Bank P 400,000

2. Payroll Account Second Bank 150,000
3. Petty Cash Fund (included 15,000 unreplenished expenses
50,000
and employee check for 5,000 dated January 5, 2017).
4. Sinking Fund- for bond payable due on March 18, 2018 100,000
5. Cash on Hand 200,000
6. Cash in Bank- for plant expansion and expected to be
150,000
disbursed on 2017
7. Time Deposit- for land acquisition in early January 2017 500,000
8. Money market placement due on June 30, 2017 350,000
9. NSF check of customers 25,000
10. IOU from employee 50,000
11. Pension Fund 500,000
12. Notes Receivable, expected to be collected on January 31,
150,000
2017.
13. BSP Treasury bill- 60 days 350,000
14. Current Account- Third Bank (80,000)
15. Undeposited check from a customer, dated January 15,
70,000
2017.
Total 2,965,000

Question: The adjusted Cash and Cash Equivalents of Madam Corporation on

December 31,2016 is
Answer:

1. Current Account First Bank P 400,000

2. Payroll Account Second Bank 150,000
3. Petty Cash Fund (50,000- 15,000-5,000). 30,000
4. Investment -
5. Cash on Hand 200,000
6. Investment -
7. Time Deposit- for land acquisition in early January 2017 500,000
8. The term is more than 3 months -
9. Accounts Receivable -
10. Accounts Receivable -
11. Investment -
12. Notes Receivable -
13. BSP Treasury bill- 60 days 350,000
14. Liability -
15. Postdated Check- Accounts Receivable -
 Adjusted Cash and Cash Equivalent P 1,630,000
Problem 3
A surprise count of the Calamay Company’s imprest petty cash fund carried on
its records at P5,000 was made in November 10, 2015.
The company acts as agent for an express company in the issuance and sale of
money orders. Blank money orders are held by the cashier for the issuance upon
payment of the designated amounts by employees. Settlement with the express
company is made weekly with its representative, who calls at the Calamy Company
office. At that time, he collects for orders issued, account for unissued orders, and
leaves additional blank money orders, serially numbered.
The count of the items presented by the cashier as composing fund was as follows:
Currency( bills and coins) P2,200
Cashed Checks 500
Vouchers (made out in pencil and signed by
740
recipients
NSF Checks(dated June 10 and 15, 2015) 260
Copy of petty Cash receipts Vouchers:
200
Return of expense advance
Sale of money orders (No. A11-20) 100 300
Blank money orders claimed to have been
purchased for P100 each from express company 600
(No. A21-29)
At the time of the count, there were also on hand the
following:
Unissued money orders (A30-40)
Unclaimed wage envelopes (sealed and
amounts not shown)

The following day, the custodian of the fund produced vouchers aggregating
P400 and explained that these had been temporarily misplaced the previous day. They
were for wage advances to employees.
Question: the proper composition of fund at November 10, 2015
Answer:
Currency and coins P 2,200
Cashed checks 500
Vouchers 740
NSF checks 260
Total P 3,700
Less: Petty cash receipt vouchers
Return of expense advance P 200
Sale of money orders 100 300
Balance of Fund per count P 3,400
Balance of Fund per records 5,000
Shortage (P 1,600)
Problem 4
The controller of Le Company is attempting to determine the amount of cash to be reported on
its December 31, 2016 balance sheet. The following information is provided:

a. Commercial savings account of P1,000,000 and a commercial checking account

balance of P900,000 are held at Phil. Banking Corporation.
b. Money market fund account held at Allied Bank, P600,000
c. Travel advance of P180,000 for executive travel for the first quarter of next year
(employee to reimburse through salary reduction)
d. A separate fund in the amount of P1,500,000 is restricted for the retirement of long-
term debt.
e. Petty cash fund, P5,000
f. An IOU from Chin Cha, a company officer, in the amount of P10,000.
g. 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 other deposits at
this bank.
h. The company has two certificates of deposit, each totaling P500,000. These
certificates of deposit have a maturity of 120 days.
i. Pacatang Company has received a check that is dated January 12, 2017 in the
amount of P125,000.
j. Currency and coins on hand amounted to P5,300.

Requirements:
Adjusted cash and cash equivalents balance at December 31, 2016 is:

SOLUTION:
Commercial Saving Account P 1,000,000
Commercial Checking Account 900,000
Petty Cash Fund 5,000
Currency and coins on hand 5,300
Adjusted CCE P 1,910,300

Problem 5

Cash on hand P 500,000

Current Account- PNB 800,000
Current Account- City Bank (100,000)
Savings Account- BPI (for equipment acquisition) 600,000
BSP Treasury Bill- 90 days 350,000
Petty Cash Fund 50,000
Total Cash and Cash equivalents 2,200,000

A customer check amounting to P30,000 dated January 2, 2017 was included in the
December 31, 2016 Cash in bank-PNB account.
Another customer check for 100,000 deposited on December 22, 2016 was included in
the cash in bank PNB account but returned by the bank as NSF. This check was
redeposited on December 26, 2016 and cleared two days later.
A P400,000 check payable to supplier dated and recorded on December 30,2016 was
mailed on January 16, 2017. This account relates to the City Bank account.
A petty cash account comprised the following on December 31, 2016:
Coins and Currencies 5,000
Petty Cash Vouchers 43,000
Return Value of 10 cases of drinks 2,000

A check of 43,000 was drawn on December 31, 2016 payable to petty cash fund.

Question: What total amount should be reported as CASH on December 31, 2016?

SOLUTION:

Cash on Hand P 500,000

Current Account PNB (800,000-30,000) 770,000
Current Account City Bank ((100,000)+400,000) 300,000
Petty Cash:
Coins and Curriencies 5,000
Replenishment Check 43,000 48,000
Total Cash 1,618,000