Prelim Learning Task 1

1. Benevolent Company had the following account balances on December

31, 2019:

Cash in bank – current account 5,000,000

Cash in bank – payroll account 1,000,000
Cash on hand 500,000
Cash in bank – restricted account for building
construction expected to be disbursed in 2020 3,000,000
Treasury bills, purchased December 15, 2019 and
due March 15, 2020 2,000,000

The cash on hand includes a P200,000 check payable to Benevolent,

dated January 15, 2020. What should be reported as “cash and cash
equivalents” on December 31, 2019?
2. The following data pertain to Meekness Company on December 31, 2019:

Check book balance 4,000,000

Bank statement balance 5,000,000
Check drawn on Meekness’ accounts, payable to supplier,
dated and recorded on December 31, 2019, but not mailed 500,000
until January 15, 2020
Cash in bond sinking fund 2,000,000

On December 31, 2019, how much should be reported as “cash”?

3. On December 31, 2020, Marvelous Company had the following cash
balances:

Cash in bank 5,000,000

Petty cash fund 50,000
Time deposit, one year, due March 31, 2021 3,000,000
Savings deposit 1,500,000

A check of P100,000 dated January 15, 2021 in payment of accounts

payable was recorded and mailed on December 31, 2020. In the current
assets section of the December 31, 2020 Statement of Financial Position,
what amount should be reported as “cash and cash equivalents”?
4. The December 31, 2019 trial balance of Gratitude Company includes the
following accounts:

Petty cash fund 50,000

Current account – First Bank 4,000,000
Current account – Second Bank (overdraft) (250,000)
Money market placement – Third Bank 1,000,000
Time deposit – Fourth Bank 2,000,000

 ❖The petty cash fund includes unreplenished December 2019 petty
cash expense vouchers for P15,000 and an employee check for
P5,000 dated January 31, 2020.
❖A check for P100,000 was drawn against First Bank current
account dated and recorded December 29, 2019 but delivered to
payee on January 15, 2020.
❖The fourth bank time deposit is set aside for land acquisition in
early January 2020.

The December 31, 2019 Statement of Financial Position should report

“cash and cash equivalents” at
5. Magnificent Company had the following account balance at December 31,
2019:

Cash in bank 2,250,000

Cash on hand 125,000
Cash legally restricted for additions to plant
(expected to be disbursed in 2020) 1,600,000

Cash in bank includes P600,000 of compensating balance against

short-term borrowing arrangement. The compensating balance is not
legally restricted as to withdrawal by Magnificent. In the current assets
section of Magnificent’s December 31, 2019 Statement of Financial
Position, total cash should be reported at
6. On December 31, 2019, Humility Company had the following cash
balances:

Cash in bank 1,800,000

Petty cash fund (all funds were reimbursed on 12/31/2019 50,000
Time deposit (due February 1, 2020) 250,000

Cash in bank includes P600,000 of compensating balance against

short-term borrowing arrangement at December 31, 2019. The
compensating balance is legally restricted as to withdrawal by Humility.
In the current assets section of Humility’s December 31, 2019 Statement
of Financial Position what total amount should be reported as cash and
cash equivalents?
7. The cash account in Bravery Company’s ledger showed a balance at
December 31, 2019 of P4,415,000 which included the following items:

Petty cash fund 24,000

Undeposited receipts, including a postdated customer check 1,220,000
for P70,000
Cash in Allied Bank, per bank statement, with a check for
P40,000 still outstanding 2,245,000
Bond sinking fund – cash 850,000
Vouchers paid out of collections, not yet recorded 43,000
IOUs signed by employees, taken from collections 33,000
4,415,000
 At what amount should cash be reported on the December 31, 2019
Statement of Financial Position?
8. The cash account in the current assets section of the Statement of
Financial Position of Cheerful Company consists of:
Bond sinking fund cash 1,500,000
Checking account in FEBTC ( A P320,000 check is still
outstanding per bank statement) 3,155,000
Currency and coins awaiting deposit 1,135,000
Petty cash fund ( of which P10,000 in is the form of paid 50,000
vouchers)
Receivables from officers and employees 175,000
6,515,000
The correct cash balance for the Statement of Financial Position is
9. Perseverance Company provided the following information with respect to
its cash and cash equivalents on December 31, 2019
Checking account at First Bank (200,000)
Checking account at Second Bank 3,500,000
Treasury savings bonds 1,000,000
Payroll account 500,000
Value added tax account 400,000
Foreign bank account – restricted (in equivalent pesos) 2,000,000
Postage stamps 50,000
Employee’s postdated check 300,000
IOU from president’s brother 750,000
Credit memo from a vendor for a purchase return 80,000
Traveler’s checks 300,000
Not-sufficient-fund check 150,000
Petty cash fund (P20,000 in currency and expense
receipts for P30,000) 50,000
Money order 180,000

What amount would be reported as unrestricted cash on the Statement of

Financial Position?
10. Account of the petty cash fund of Joyful Company showed its composition
as follows:
Coins and currency 3,300
Paid vouchers:
Transportation 600
Gasoline 400
Office supplies 500
Postage stamps 300
Due from employees 1,200 3,000
Manager’s check returned by bank marked NSF 1,000
Check drawn by company to the order of petty
cash custodian 2,700
What is the amount of the petty cash fund for Statement of Financial
Position purposes?
11. The petty cash fund of the Careful Enterprises immediately after the close
of business on September 30, 2019, the end of the company’s fiscal year
is composed of the following:
Currencies 20,000
Coins 2,000
Petty cash vouchers:
Gasoline payments for delivery equipment 3,000
Medical supplies for employees 1,000
Repairs of office equipment 1,500
Loans to employees 3,500
A check drawn by the company payable to the order of
Margaux Marasigan, petty cash custodian representing her 15,000
salary
An employee’s check returned by the bank by insufficiency
of funds 3,000
A sheet of paper with names of several employees
together with contribution for a birthday gift of a
co-employee. Attached to the sheet of paper is a currency 5,000
of
The petty cash general ledger account has an imprest balance of P50,000.
Based on the above data, what is the amount of petty cash fund that
should be shown on the Statement of Financial Position as of September
30, 2019?
12. Triumphant Company’s checkbook balance on December 31, 2019 was
P5,000,000. In addition, Triumphant held the following items in its safe
on that date:
Check payable to Triumphant, dated January 2, 2020 in
payment of a sale made in December 2019, not
included in December 31 checkbook balance 2,000,000
Check payable to Triumphant, deposited December 15
and included in December 31 checkbook balance, but
returned by bank on December stamped “NSF” The
check was redeposited on January 2, 2020 and cleared 500,000
on January 9, 2020
Check drawn on Triumphant’s account payable to
vendor, dated and recorded in Triumphant’s books on
December 31, but not mailed until January 10, 2020 300,000
The proper amount to be shown as “cash” on Triumphant’s Statement of
Financial Position at December 31, 2019 is
13. The checkbook balance of Freedom Company on December 31, 2019 was
P4,000,000. Information about certain cash items follows:
❖A customer check amounting to P200,000 dated January 2, 2020
was included in the December 31, 2019 checkbook balance.
❖Another customer check for P500,000 deposited on December 22,
2019 was included in its checkbook balance but returned by the
bank for insufficiency of fund. This check was redeposited on
December 26, 2019 and cleared two days later.
❖A P400,000 check payable to supplier dated and recorded on
December 30, 2019 was mailed on January 16, 2020.
 ❖A petty cash fund of P50,000 with the following summary on
December 31, 2019:
Coin and currencies 5,000
Petty cash vouchers 43,000
Return value of 20 cases of soft drinks 2,000
Total 50,000
❖A check of P43,000 was drawn on December 31, 2019, payable to
Petty Cash.
What is the “cash” balance on December 31, 2019?