PROBLEM 1

You as the Accountant, of Madaya A Co. gathered the following information regarding its cash in bank
for the month of June of the current year:
a. Balances per bank statements: May 31, P1,250,000 and June 30, P1,350,000.
b. Balances of cash in bank account in company’s books: May 31, P1,251,000, and June 30,
P1,051,000
c. Total charges in the bank statement during June were P1,300,000.
d. Undeposited receipts were: May 31, P200,000 and June 30, P153,000
e. Outstanding checks as of May 31, P150,000
f. Erroneous bank credits were: May 31, P45,000 and June 30, P17,000
g. Erroneous bank charge were: May 31, P20,000 and June 30, P30,000
h. Collections by bank not recorded by Company were P125,000 in May and P150,000 in June.
i. NSF not entered in company’s nooks were: May 31, P110,000 and June 30, P75,000
j. Customer’s checks deposited in May amounting to 21,000 was erroneously entered in the books
as P12,000. Not yet corrected.
k. Overstatement of Check in payment of rent payable on May 31 amounting to 90,000 and
120,000 on June 30. Corrected on the same month

Required:
A. Prepare statement of Proof of cash using adjusted balance method. (30points)
B. Answer the following questions (5points each):
1. How much is the adjusted balance of May 31?
2. How much is the adjusted balance of June 30?
3. How much is the adjusted receipts?
4. How much is the adjusted disbursement?
C. In one entry. What is the proper journal entry?
PROBLEM 2
On December 31, 2021, Babagsak ang Madaya Corp. cash and cash equivalents account consist of the
following balances:
Manager's check 70,000.00
Traveler's check 100,000.00
Treasury note 50,000.00
Treasury shares, purchase on 12/1/2021, to be reissued on 3/1/2022 150,000.00
Escrow deposit 200,000.00
Bank overdrafts 20,000.00
Postal money orders 20,000.00
Demand deposit 100,000.00
Treasury bills, purchased December 16, 2021 due March 15, 2022 50,000.00
160-day Treasury bill 30,000.00
Time deposit - PCIB, one year Due March 31, 2022 180,000.00
Time deposit - PNB 91 days 170,000.00
Time deposit - BPI 120 days 45,000.00
Money market instrument - due 2/28/2022 40,000.00
Money market instrument - due 6/1/2022 70,000.00
Cash in bank - Metrobank, which includes a compensating balance of 50,000
for shorterm borrowing arrangement. The compensating balance is legally
restricted as to withdrawal 1,050,000.00
Cash in bank - Motrobank (100,000.00)
Cash in bank - Firstbank, which includes a compensating balance of 50,000 for
long term borrowing arrangement. The compensating balance is legally
restricted as to withdrawal. 450,000.00
Cash in bak - Secondbank (60,000.00)
Cash in bank - Seatacbank, which includes a compensating balance of 40,000
for long term borrowing arrangement. The compensating balance is legally
restricted as to withdrawal. 150,000.00
Cash in bank - Seabank, which includes a compensating balance of 40,000 for
short term borrowing arrangement. 250,000.00
Petty cash fund, which excludes an unreplenished voucher for 4,000 10,000.00
Payroll fund 100,000.00
Travel fund 20,000.00
Interest fund 40,000.00
Tax fund 30,000.00
Sinking fund 420,000.00
Preferred redemption fund 100,000.00
Contingent fund 200,000.00
Insurance fund 500,000.00
Fund for acquisition of PPE expected to be disbursed in 2022 800,000.00
IOU from officers 20,000.00
Customer's post dated checks 70,000.00
Customer's checks returned by bank marked "NSF" 20,000.00
Redeemable preferred shares - acquired 3 months before maturity date 15,000.00
Unused credit line 200,000.00
Revolving fund 100,000.00
Visa card credit limit 20,000.00
Total 5,700,000.00

Required:
Determine the amount to be reported as part of cash and cash equivalent (20points)