Answers on Quiz on Cash and Cash Equivalents – Quiz 1 on Prelim Term Period

1. Adjusting Entries:
a. Accounts Receivable 150,000
Cash on Hand 150,000
b. Expenses 10,000
Receivable from Employees 5,000
Petty Cash Fund 15,000
2. Total Cash and Cash Equivalents:
Cash on Hand (unadjusted) P 1,000,000
Less: Postdated Check ( 150,000 )
Cash on Hand (adjusted) P 850,000

Petty Cash Fund (Unadjusted) P 50,000

Less: Expenses (10,000 )
Postdated Employees Check ( 5,000)
Petty Cash Fund ( Adjusted ) P 35,000

Cash on Hand P 850,000

Petty Cash Fund 35,000
Security Bank – Current Account 2,000,000
PNB Current Account 1,500,000
Bond Sinking Fund – Current 2,500,000
Total Cash and Cash Equivalents P6,885,000

3. Presentation of Items Excluded from Cash and Cash Equivalents:

a. The BSP 120 day treasury bill of P3,000,000 is separately shown as short term investment
(current asset)
b. The overdraft in BDO current account of P200,000 is shown as current liability.
c. The BPI time deposit of P2,000,000 is shown as non-current asset (long term investment)
because it is restricted for land acquisition.