Cash and cash Equivalents

Exercise Problems
 Problem 1

The nature of the assets determines which accounting standards will apply for their accounting
treatment. Classify the following accounts found in the ledger of Glory Corporation as (A) financial
assets or (B) non-financial assets.
1. Cash
2. Cash Equivalents
3. Accounts Receivable
4. Inventories
5. Debt Investments at Fair Value
6. Debt Investments at Amortized Cost
7. Unused supplies
8. Property, Plant and Equipment
9. Franchise
10. Equity Investments at Fair Value
11. Investment in Associates
12. Investment Property
13. Investment in Subsidiary Company
14. Advances to Officers and Employees
15. Deposits on Utility Contracts
16. Cash Surrender Value of Life Insurance Policy
17. Patents
18. Goodwill
19. Claims for Income Tax Refund
20. Deferred Tax Asset
 Problem 2

The statement of financial position of Money Company on December 31, 2020 shows Cash of P330,820. The following items were
found to compromise this total amount:

Checking account in Metrobank, (outstanding checks as of

Year-end totaled P15,200) P105,200
Savings account at Far East Bank 30,800
Petty cash fund (including expense receipts for P250) 1,500
Cash on hand (undeposited sales receipts) 4,200
Sinking fund cash 35,000
Cash in foreign bank (in equivalent pesos) 65,000
Customers’ checks on hand:
Traveler’s check 14,000
Manager’s check 23,120
Short-term treasury bills 52,000
Money Company also has on hand a check payable to supplier amounting to P62,000, which has been recorded in the cash
disbursements journal in December.

Required: What is the correct amount of cash?

 Problem 3

Cotton Company’s checkbook balance at December 31, 2020 was P180,000. In addition, Cotton held the
following items in its safe on that date.
- Check payable to Cotton amounting to P65,000 dated January 2, 2020 in payment of a sale made in
December 2020, was included in December 31 checkbook balance
- Check payable to Cotton was deposited on December 15, but returned by the bank on December 29
stamped “DAIF”. No entry has yet been made to record the return of this P20,000 check.
- Check drawn on Cotton’s account, payable to a vendor, was dated and recorded on December 28. This
check amounting to P15,000, however, was not yet mailed to the payee as of December 31, 2020.

Required:
a. What is the correct amount shown as Cash on Cotton Company’s December 31, 2020 statement of
financial position.
b. Prepare adjusting entries to bring the Cash account to its correct balance.
 Problem 4

Grain Company’s general ledger showed a balance of P2,205,600 in its “Cash” account on December 31, 2019. Included in
this balance are the following items:

DAIF checks from customers returned by bank P20,000

Savings account with BDO, earmarked for an office equipment
due for delivery in January 2019 750,000
IOUs from employee 5,200
Undeposited checks from customers 10,000
Undeposited bills and coins received from customers 30,500
Cash in sinking fund 500,000
Customers’ checks dated January 2020 25,400
Travel advances 8,000
Traveler’s checks 18,000

Required:
a. Determine the total amount that should be included in cash balance at December 31, 2019
b. Prepare entries to remove non-cash items from the entity’s Cash account.
 Problem 5

Rod Company reported a Cash balance of P1,980,000 on December 31, 2019 which consisted of the
following:

Petty cash, including IOU from an employee of P1,250 P10,000

Cash on hand, including a customer’s check of P17,500,
dated January 5, 2020 625,000
Cash in bank, General Account, net of P12,500 bank
overdraft in another bank’s account 525,000
Cash in bank, Payroll Account, net of P10,000 check dated December 28, 2019
but unreleased as of December 31 320,000
Savings deposit, restricted for the purchase and intended
for equipment acquisition 500,000

Required: What is the correct amount of cash that should be shown in Rod Company’s statement of financial
position at December 31, 2019?
 Problem 6

The chief accountant of Latte Company is determining the amount of Cash and Cash Equivalents to be
reported on its December 31, 2019 statement of financial position. She found out that the “Cash and
Cash Equivalents” balance in the general ledger was composed of the following items.
(a) Savings account of P900,000 and a commercial checking account with balance of P1,400,000 are
held at Allied Bank.
(b) Petty cash fund of P15,000; composed of expense receipts of P5,000; and bills and coins of P9,850
at December 31.
(c) Cash fund in savings account with Metrobank, P1,500,000 held for retirement of bonds payable,
due December 32, 2022.
(d) Money market fund account held at BDO which permits Latte Company to write checks on this
balance, P2,000,000.
(e) Three certificates of deposits with Metrobank, each totaling P1,000,000, two of which have
maturity of 120 days from date of placement (November 30, 2019); one has a maturity of 90 days
(placed on December 29,2019).
(f) Payroll fund maintained with BDO, P6,000,000.
She also obtained the following information:
(g) A customer’s check on hand dated January 10,2020 for P320,000. The check was recorded as collected in
December and was included in the P900,000 savings accounts with Allied Bank.
(h) A check for P300,000 was issued to a supplier on December 29,2019 and drawn from Allied Bank account.
The check was dated January 8, 2020 and was traced to have been entered in the December check register.
(i) Latte maintains a P5,000,000 cash balance at all times at BPI to ensure future credit availability.
(j) A check for P50,000 for adjustment in salaries of an employee for the month of November was still on
hand at December 31, 2019. The check was verified to have been recorded in the cash disbursements journal
in December.
Required:
(a) Compute the amount of cash and cash equivalents to be reported on December 31,2019 statement of
financial position. It is the policy of the company to treat as cash equivalents instruments with maturity
date of 90 days or less.
(b) Indicate the proper reporting for items that are not reported as cash and cash equivalents .at December
31, 2019.
 Problem 7
As a step to safeguard the company’s cash balance, the Jessie Company established an imprest petty
cash fund in November 2019. From November 2019 through January 2020, the company completed the
following transactions related to petty cash.
2019
Nov. 20 The company established an imprest petty cash fund amounting to P5,000 and issued a
check payable to the petty cash custodian.

Nov.20- The petty cash custodian paid the following from petty cash fund, all supported by
Dec.15 properly approved party petty cash vouchers:
Transportation P1,500
Representation 1,200
Freight for merchandise purchased 1,300
Computer repairs 920

Dec.16 The petty cash custodian submitted the above paid petty cash vouchers to request for
replenishment of the fund. A check amounting to P4,920 was issued to the petty cash
custodian.
Dec 16-31 The petty cash custodian paid the following from petty cash fund.
Transportation P 340
Office Supplies 1,400

Dec. 31 A count of the petty cash fund revealed the following composition:
Bills and coins P3, 260
Paid petty cash vouchers for
Transportations 340
Office Supplies 1,400

The fund was not replenished on this date.

2020
Jan 1-8 The petty cash custodian paid the following:
Representation P 1, 800
Office Supplies 1,300
Transportation 120
Jan 9 The petty cash custodian submitted the petty cash vouchers evidencing payments from
December 16 through January 8. A check was issued to the petty cash fund for its
replenishment
and to increase its balance by P3,000.
Required:
Prepare journal entries for the given transactions. Include any appropriate adjusting entries on
December 31, the end of the company’s reporting period, and reversing entries on January 1.
 Problem 8

On June 1, 2019, Coral established a petty cash fund of P5,000 for incidental expenses. At the end of the
month, the count of cash on hand indicated that P670.40 remained in the fund. A review of the petty
cash vouchers disclosed that the following expenses had been paid during the month from the petty
cash fund.
Office supplies P 341.60
Transportation 1, 321. 40
Postage 780.00
Miscellaneous 837.60
Representation 1,000.00
Required:
(a) What is the amount shortage in the petty cash fund?
(b) Prepare the necessary adjusting entry on June 30, the company’s reporting date, to remove the
non-cash items from the Petty Cash Fund.
 Problem 9

Prada Company established a petty cash fund to help ensure internal control over its small
expenditures. The following are the transactions affecting the petty cash fund for the month of May
2019:
1. On May 2, the company established a petty cash fund in the amount P8,000.
2. The following were paid by the petty cash custodian from May 2 through May 20:
Freight on merchandise purchases P2,500
Freight on merchandise sold 3,000
Supplies purchased 800
IOUs from employees 1,200
3. On May 18, the employees paid their IOUs as indicated above (the advances were granted on May
10; the proceeds from such collection were returned to the petty cash fund).
4. On May 20, the fund was replenished.
5. Payments from petty cash fund from May 20 through May 31 are as follows:
Freight on merchandise purchases P 1,200
Transportation of messenger 150
Medicines for employees 320
IOUs from employees 500
6. A count of the fund on May 31 revealed bills and coins in the petty cash
amounting to P5,700.

The company’s reporting period ends May 31.

Required:
Prepare journal entries for the above transactions, including any adjustments
on May 31, 2019.
 Problem 10

In your cash count of the petty cash fund of Canon Company as of July 4,2019, you found the following
items in the petty cash box:
Bills and coins counted P 1,450
Approved and signed petty cash vouchers
Dated June 2019 3,300
Dated July 1-4, 2019 800
IOU from Joe Santos, an employee 1,400
A check drawn by Juvy Victoria, an
employee, dated July 15, 2019 2,000
An unsigned pay envelope, payable to
an employee on leave, the envelope has
been opened and there was no money inside.
Indicated in the envelope is the amount of. 1,500
The petty cash fund has an imprest balance of P10,000. The company’s reporting period ends on June
30.
Required:
(a) Determine the amount of petty cash fund that will be included in the cash balance at June 30,2019.
(b) Determine the amount of cash shortage or overage.
(c) Prepare the necessary adjusting entry to bring the petty cash fund to its correct amount at June 30,
2019.
 Problem 11

A count of petty cash fund in the morning of January 5, 2020 revealed the following:
Bills and coins P 4,560
Petty cash vouchers
dated December 2019 3,140
dated January 2020 1, 130
IOUs (without supporting vouchers)
dated December 2019 1,800
dated January 2020 1,000
Unsigned payroll envelope 2,000
(the enveloped has been opened,
there is no money inside)

The imprest balance of the petty cash fund is P10,000.

Required:
(a) Determine the amount of petty cash fund that will be included in the cash balance at December 31,
2019.
(b) Determine the amount of cash shortage or overage.
(c) Prepare the necessary adjusting entry to bring the petty cash fund to its correct amount at
December 31, 2019.
 Problem 12
The December 31, 2019 bank statement for Giordano Corp. showed a balance of P 199,925. On this date, the company’s Cash
count reflected an overdraft of P32, 560. In reconciling theses amounts, the following information is discovered:
a. Cash on hand for undeposited sales receipts, December 31, 2019, P13, 025.
b. Customer’s NSF check returned with bank statement, P42,040.
c. Cash sales of P64,025 for the week ended December 18, 2019 were recorded in the books. The cashier reports this
amounting missing, and it was not deposited in the bank.
d. Note receivable of P250,000 and interest of P2,500 were collected by the bank and not recorded in the books.
e. Deposit in transit December 31,2019, P35,000.
f. A customer’s check for P29,040 in payment of its account was recorded in the books at P94,020.
g. Outstanding checks, P204,055, include a duplicate check of P7,085 to C. Santos, who notified Giordano that the original was
lost. Giordano stopped payment on the original check and has already adjusted the cash account in its accounting records
for this amount.
h. The cash account includes petty cash fund in the amount of P5,000. When the fund is counted on December 31, it was found
to include paid petty cash vouchers totaling P1,800.
Required:
a. Prepare a bank reconciliation at December 31, 2019 that brings both the bank and book balances to a corrected figure.
b. Prepare adjusting entries for the foregoing.
 Problem 13
The following information pertains to David Corporation:
BANK OF MAKATI- BANK STATEMENT
Date Check no. Debit Amount Legend Credit Balance
Amount
10/31/19 Beg. Balance 180,000.00
11/3/19 Deposit 40,000 220,000.00
11/5/19 212610 60,000.00 Clearing check 160,000.00
11/6/19 CM-PN collected 50,000.00 210,000.00

11/10/19 35,000.00 DM-NSF Check 175,000.00

11/10/19 1,500.00 DM-Service charge 173,500.00
11/10/19 10,000.00 EC 163,500.00
11/12/19 212612 13,500.00 Clearing check 150,000.00
11/17/19 Deposit 100,000.00 250,000.00
11/20/19 212611 50,000.00 Clearing check 200,000.00
11/25/19 Deposit 85,000.00 285,000.00
11/30/19 212615 50,000.00 Clearing check 236,000.00
220,000.00 275,000.00
 David Corporation General Ledger
Cash in Bank – Bank of Makati
Date Item Posting Ref. Debit Credit Balance
11/1/2019 Balance 150,000.00
11/17/19 CR¹ 100,000.00 250,000.00
11/25/19 CR¹ 85,000.00 335,000.00
11/30/19 CR¹ 35,000.00 370,000.00
11/5/19 212611 CR¹ 50,000.00 320,000.00
11/10/19 212612 CR¹ 15,300.00 304,700.00
11/10/19 212613 CR¹ 5,000.00 299,700.00
11/10/19 212614 CR¹ 4,000.00 295,700.00
11/17/19 212615 CR¹ 50,000.00 245,700.00
11/17/19 212616 CR¹ 16,000.00 229,700.00
220,000.00 140,300.00
 David Corporation
Bank Reconciliation Statement
October31,2019
Balance per bank statement, 10/31/19 P180,000.
Add deposits in transit 40,000
Total P220,000
Less: Outstanding checks (#212610) P60,000
Bank credit recorded in error 10,000
Total deduction 70,000
Balance per books, 10/31/19 P150,000

Use the foregoing documents, (Bank statement for David Corporation, Cash in Bank account, and prior month’s Bank
Reconciliation Statement) in answering the following questions.

Required:
(a) How much is the total deposit in transit for November 30, 2019 bank reconciliation statement?
(b) How much is the total outstanding checks for November 30, 2019 bank reconciliation statement?
(c) Prepare a bank reconciliation statement for David Corporation at November 30,2019.
 Problem 14

The following data pertaining to the cash transactions and bank accounts of Pound Company for July
2019 are as follows:
Cash balance per accounting records, July 31, 2019, P17, 194.
Cash balance per bank statement, July 31, 2019, P31,848.
Bank service charge for July, P109.
Debit memo for printed checks delivered by the bank; the charge has not been recorded in the
accounting records, P225.
Outstanding checks, July 31, 2019, P6,728.
Deposits of July 31 not recorded by the bank until August 1, P4,880.
Proceeds of a bank loan on July 31 not recorded in the accounting records, net of P300 interest, P5,700.
Proceeds from customer’s promissory note, principal amount, P8,000, collected by the bank, not taken
up in the books, with P100 interest, P8,100.
Check #1210 payable to a supplier entered in the accounting records as P2,100 deducted in the bank
statement the erroneous amount of P1,200.
Stolen check lacking an authorized signature deducted from Pound’s account by the bank in error, P800.
Customer’s check returned by the bank marked DAIF, indicating check. No entry has been made in the
accounting records to record the returned check, P760.
Required:
(a) What is the correct cash balance as of July 31, 2019? To answer this question, prepare bank
reconciliation statement.
(b) Prepare the necessary adjusting entries at July 31, 2019.
 Problem 15

In comparing the balance per books of Bench Company with the bank statement obtained from the
bank, together with the canceled checks and other memoranda at December 31, 2019, you observe the
following:
a. Balance per bank statement P 892,346.30
b. Balance per books 590,884.60
c. Outstanding checks, 12/31/19 333,788.20
d. Receipts of 12/31/19 deposited on 01/02/20 53,172.20
e. Service charge for December 2019 225.00
f. Proceeds of bank loan, 12/15/19 omitted from company
records (discounted for 3 months at 12% per year) 97,000.00
g. Deposited of 12/23/19 omitted from the bank statement 28,924.10
h. Check of Rome Products charged back on 12/22/19 for lack of
Counter signature, redeposited on 01/05/20. No entry was made
For the charge back or the redeposit. 8,737.40
I. Error on bank statement in entering deposit of 12/16/19:
correct amount P31,824.00
Entered in statement 31,814.00 10.00
j. Check #3917 of Birch Company charged in error to the
company’s account 26,900.00
K. Proceeds of note of J. Sumera &co. collected by bank on
12/01/19 not entered on books:
Principal P20,000.00
Interest 400.00
Total P20,400.00
Less collection charge 50.00 20,350.00
L. Erroneous debit memo of 12/23/19 to charge company’s account with
Settlement of bank loan which was paid by check #4020 on same date 50,000.00
m. Error on bank statement in entering deposit of 12/04/19
Entered as P48,171.00
Correct amount 48,071.00 100.00
n. Deposit of Birch Company on 12/07/19
erroneously credited in the company’s account 18,192.00

Required:
Determine the correct cash balance of Bench Company at December 31,2019
 Problem 16

The bank statement of Amethyst Corporation for April, 2019 showed an ending balance of P169,263.
Deposit in transit on April 30 was ‘P18,200. Outstanding checks as of April 30 were P59,435. During the
month of April, the bank charged back NSF checks in the amount of P3,435 of which P1,835 had been
redeposited by April 30. The company made no entry for the return and for the redeposit of the checks.
On April 23, the bank charged Amethyst Corporation’s account for a P2,200 item which should have
been charged against the account of Ametite Corporation; the error was not detected by the bank.
During April, the proceeds from notes collected by the bank for Amethyst Corporation were P7,548 and
bank charges for this service were P180.

Required: What is the unadjusted book balance for “Cash” of Amethyst Corporation at April 20,2019?
 Problem 17

In preparing its bank reconciliation at December 31,2019, Silver Company had made available the following
information:
Balance per bank statement P380,750
Deposits in transit 52,000
Outstanding checks 67,500
Amount erroneously credited by bank to Silver’s account 4,000
Bank service charge for December 750
Check drawn, dated and recorded December 31,2019, but
not mailed until January 10,2020 (included in the total
outstanding checks above) 9,000
Check of Silver Lining Company charged by bank to the
account of Silver Company 12,000

Required:
What is the amount shown as Cash on Silver’s December 31,2019
Statement of financial position?
 Problem 18

You are attempting to determine an apparent cash shortage that you believe resulted from an
employee’s theft. You have assembled the following information for the month of March:
Cash balance per books, March 1 P115,963.70
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

Required:
By preparing a book to bank reconciliation, compute the amount of the suspected cash shortage.
 Problem 19

In reconciling the book and bank balances of the Cash account of Pearl Corporation, you discover the
following for the month of December 2019:
Balance per bank statement P400,000
Balance per books 387,000
Receipts of 12/31/2019 not yet deposited 100,000
Bank service charges for December 1,000
A paid check for P40,000 was recorded in the
cash book as P4,000
Customer’s check returned by bank marked
“DAIF” 22,000

Required:
Assuming no other errors except as noted, what is the amount of the outstanding checks at December
31, 2019?
 Problem 20

The following data related to ABC Services, Inc.:

Nov. 30, 2019 Dec. 31, 2019
Balance per books P 270,311.00
Balance per bank statement 294,771.00 P148,986.00
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 P1,072,850.00 and
P1,195,536.50,respectively.
• Total deposits/credits reflected in the bank statement amounted to P1,065,620.00
• Check No. 137412 for P2,300.00 recorded by depositor as P3,200.00 in error.
• P625 interest chargeable to ABC Trading, Inc. was erroneously charged by the bank to ABC Services,
Inc.
• Customer’s check for P5,947.00 deposited on December 28, 2019 was found to be uncollectible.
• No sufficient fund check in the amount of P5,000.00 was returned by the bank and redeposited by
ABC Services, Inc. during December. No entry was made in the books for the return or redeposit.

Required:
Prepare a four- column reconciliation for ABC Services Inc.
 Problem 21

The accountant of Bruins Company gathered the following data in his attempt to reconcile its records with
the data from the bank statements sent by Banco de Plata (BDP) for the months of March and April.
March April
Cash in BDP per ledger 2,055,300 3,002,500
Balances per bank statement 2,203,500 3,097,250
Credits to Cash in BDP account 4,619,800
Deposits and credit memos per
bank statement 5,251,500
Outstanding checks 275,000 580,000
Deposit in transit 125,000 670,000
Erroneous bank credit 20,000
Note collected by bank 17,000
Bank Service charge 1,800 2,450
Bruins Company discounted its own note for P200,000 with the bank in April at the discount rate of
12%. The note is due in 6 months. The net proceeds was credited by the bank in April but has not yet
been recorded in the books.
Book receipt for April is understated by P4,500
Book disbursement for April is overrated by P2,700
Loan Amortization for April amounting P45,000 was covered by a check payment but a debit memo for
the same amount was issued by the bank in April.

Required:
Prepare a four-column reconciliation for Bruins Company.
 Problem 22

The following bank reconciliation is represented for Lily Company for the month of July 2019:
Balance per bank statement, 7/31 P180,000
Add deposits in transit 40,000
Total P220,000
Less: Outstanding checks P60,000
Bank credit recorded in error 10,000 70,000
Balance per books, 7/31 P150,000

Data per bank statement for the month of August 2019 follow:
August deposits, including note for P50,000
collected in behalf of Lily Company P275,000
August disbursements (including NSF for P35,000
and service charges of P1,500) 220,000
All items that were outstanding as of July 31 cleared through the bank in August, including the bank
credit. In addition, P25,000 in checks were outstanding and deposits of P35,000 were in transit as of
August 31,2019.
Required:
Compute the following:
(a) Cash receipts per books during August
(b) Cash disbursements per books during August
(c) Unadjusted cash balance per ledger at August 31,2019
(d) Correct cash balance at August 31,2019
 Problem 23

Leo Company has just received the August 31,2019 bank statement which is summarized below:
Balance, August 1 P93,690
Deposits during August 320,000
Note collected for depositor, including P360 interest 10,360
Checks cleared during August (344,000)
Bank Service charges ( ,500)
Balance, August 31 P79,550
The general ledger cash account had the following entries for the month of August 2019:
CASH
Balance, August 1 97,290 Disbursements in August 349,000
Receipts during August 350,000
All outstanding checks as of July 31, 2019 amounting to P6,400 cleared the bank in August. Deposits in
transit at August 31, totaled P40,000.
Required:
Determine the following:
(a) Outstanding checks at August 31,2019
(b) Deposits in transit at July 31, 2019
 Problem 24

The following information was included in the bank reconciliation for VAB, Inc. Assume all other reconciling
items are listed below:
Checks and charges recorded by bank in May
including a May service charge of P500 P80,000
Service charge made by bank in April and recorded
in the books in May 1,000
Total credits to cash in all journals during May 90,000
Customer’s NSF check returned as a bank
charge in May (no entry made in the books) 10,000
Customer’s NSF check returned in April and
redeposited in May (no entry made in the books
in either April or May) 5,000
Outstanding checks at April 30 30,000

Required:
How much were the total outstanding checks at May 31?
 Problem 25

Diamond Company uses four-column reconciliation. The bank reconciliation for July shows P4,500 of
deposits still in transit. The bank statement for August showed that bank recorded receipts totaling
P45,600, P6,300 of which was a note collected from one of its clients. The bank made an erroneous
charge P10,000 in July, which was corrected only in August.
During August, the company recorded in its books total receipts of P40,000. Included in these receipts
of P40,000. Included in theses receipts were P5,120 proceeds of note collected by the bank in July
which company recorded only in August.
Required:
What is the amount of deposits still in transit for August 31 reconciliation?
 Problem 26

Presented below is the November 30, 2019 reconciliation of the cash account of Real Gem Company:
Balance per bank statement, 11/30/19 P39,375.00
Add Deposits in transit 18,207.50
Total P57,582.50
Less: Outstanding checks P24,750.00
Erroneous bank credit 9,218.00 33,968.00
Balance per books, 11/30/19 P23,614.50
Additional Information:
Balance per bank statement, 12/31/19 P46,828.50
Bank receipts (credits) during December
including all outstanding checks on 11/30/19
and the erroneous bank credit in November 62,277.00
Outstanding checks, 12/31/19 37,855.00

Required:
What is the amount of the total disbursements per books for the month of December 2019?
 Problem 27

At September 30,2019, cash receipts and cash disbursements per general ledger Cash in Bank account
of Lira Company are P30,500 and P24,000, respectively. The bank statement for the same month
indicates that only P30,200 in deposits were received during the month and checks clearing the bank
were P23,600.
The August 31,2019 bank reconciliation showed deposits in transit of P9,500. Outstanding checks at
September 30,2019 were P2,000.
Required:
How much were the deposits in transit at September 30,2019 and the outstanding checks at August
31,2019.
 Problem 28

The trial balance of Euro Company at December 31,2019 includes the following accounts:
Petty Cash Fund P5,000
Cash on Hand 19,700
Metrobank, Current Account 110,200
Allied Bank, General Account 162,000
Allied Bank, Payroll Account (credit balance) 4,000
Security Bank, Savings Account 65,000

a. The petty cash fund consisted of the following items as of December 31, 2019:
• Currency and coins P1,490.
• Employee’s advances, with no supporting vouchers, P880
• Currency in an envelope marked “collections for charity” with employees’ names attached, P160.
• Unreplenished petty cash vouchers, P740
• Replenishment check drawn by Euro payable to the petty cashier, P1,830
b. Cash on hand includes the following items:
• Customer’s check for P5,000 returned by bank on December 26,2019 due to insufficient funds, but
subsequently redeposited and cleared by the bank on January 10,2020.
• Postal money orders received from customers, P2,800.
• Customer’s checks for P1,500 dated January 10, 2020 received December 23,2019.
c. Included among the checks drawn by Euro against the Metrobank current account and recorded in
December 2019 are the following:
• Check #1214 written and dated December 23, 2019 and delivered to payee on January 3, 2020,
P2,500.
• Check #1219 written December 26,2019, dated January 30,2020, delivered to payee on December
28,2019, P4,300.
d. The credit balance in Allied Bank payroll account represents checks drawn in excess of the deposit
balance. The checks are still outstanding at December 31,2019. A right of offset exists in the agreement
between Allied Bank and kits depositors.
e. The savings account deposit in Security Bank was a fund set aside by the Board of Directors for the
acquisition of new equipment. The company expects to disburse the amount in March 2020.

Required:
(a) Determine the correct amount of cash reported as current asset in Euro’s December 31,2019
statement of financial position.
(b) Present the items in the statement of financial position. Include appropriate notes in the financial
statement.