Problem 1: On December 31, 2021, W Company’s cash and Problem 2: On December 31, 2021, G Company’s cash and cash

cash equivalents account balance per ledger of 5,700,000 equivalents account balance per ledger of 4,000,000 includes:
includes: Demand deposit 2,200,000
Green Items – Cash and Cash Equivalents Undeposited collection 300,000
Red Items – Noncash and Noncash Equivalents Time deposit- 30 days 500,000
Manager’s check 70,000 NSF check of customer (20,000)
Traveler’s check 100,000 35-day money market placement due 1/28/22 300,000
Treasury notes 50,000 45-day commercial papers due 2/4/22 80,000
Treasury shares, purchased 12/1/21, to be Savings deposit in closed bank (50,000)
150,000
reissued on 3/1/22 IOU from an employee – trade and other (150,000)
Escrow deposit 200,0000 receivables
Bank drafts 20,000 Preferred redemption fund (400,000)
Postal money orders 20,000 Total 4,000,000
Demand deposit 100,000 Additional information:
Treasury bills, purchased 12/16/21 due 3/15/22 50,000 a. Included in the demand deposit of 2,200,000 was a
160-day treasury bill 30,000 customer check amounting to 50,000 dated January 25,
Time deposit- PCIB, 1-year, due 3/31/22 180,000 2022. G Company is the payee/ post-dated check
Time deposit, PNB 90-days 170,000 b. Also included in the demand deposit is a customer
Time deposit, BPI 120-days 45,000 check amounting to 90,000 dated December 31, 2020.
Money market instrument, due 2/28/22 40,000 G company neglected to in-cash the check. On
Money market instrument- due 6/1/22 70,000 December 31, 2021, the customer was informed and he
Cash in bank- Metrobank, which includes a was willing this replace this with a new one. New check
compensating balance of 50,000 for short-term is yet to be received from the customer. G Company is
1,050,000 the payee/ stale check
borrowing arrangement. The compensating
balance is not legally restricted as to withdrawal c. Check of 60,000 dated January 31, 2022, in payment of
Cash in bank- Metrobank (100,000) accounts payable was recorded and mailed December
Cash in bank- First bank, which includes a 31, 2021. G Company is the payor/ post-dated check
450,000- d. Check of 70,000 in payment of accounts payable was
compensating balance of 50,000 for long-term
400,000 = recorded on December 31, 2021 but mailed to creditors
borrowing arrangement, the compensating
50,000 on January 15, 2022. G Company is the payor/
balance is legally restricted as to withdrawal
Cash in bank- Second Bank (60,000) undelivered check
Cash in bank- Seat Bank, which includes a e. The company uses the calendar year. The cash receipts
150,000- journal was held open until January 15, 2022, during
compensating balance of 40,000 for short-term
110,000= which time 80,000 was collected and recorded on
borrowing arrangement. The compensating
40,000 December 31, 2021. Window Dressing/
balance is legally restricted as to withdrawal
Kiting/Lapping – Fraudulent Process of Cash
Cash in bank- Sea Bank, which includes a
Requirements:
compensating balance of 40,000 for short-term 250,000
a. Prepare the adjusting entries to correct the cash
borrowing arrangement
account.
Petty cash fund, which includes an unreplenished
10,000 b. Compute the cash and cash equivalents to be shown on
voucher for 4,000.
December 31, 2021 statement of financial position (3
Payroll fund 100,000
points)
Travel fund 20,000
Interest fund 40,000
Payor - the entity who is liable to pay
Tax fund 30,000
Payee - the entity who is the rightful receiver of the payment
Sinking fund 420,000
Preferred redemption fund 100,000
Contingent fund 200,000
Insurance fund 500,000
Fund for acquisition of PPE expected to be
800,000
disbursed in 2022
IOU from officers 20,000
Customer’s post-dated checks 70,000
Customer’s check returned by bank marked NSF 20,000
Redeemable preference shares acquired 3 months
15,000
before maturity date
Unused credit line 200,000
Visa card credit limit 20,000
Total 5,700,000
a. Compute the amount of cash and cash equivalents that
should be presented to the statement of financial
position (3 points) 2,491,000
b. Indicate the proper classification of each item that are
not part of the cash and cash equivalents (0.50 point
each) 20 items are not cash and cash equivalents