Problem 1

Lion company shows the following account balances in their financial records as of
December 31, 2020:
Checking Account of Morgan Bank (20,000)
Checking Account of Land Bank 500,000
Payroll Account – National Bank 100,000
Foreign bank accounts – restricted 750,000
Postage Stamps 22,000
Employee’s Post dated check 30,000
IOU from President’s brother 75,000
Traveler’s Check 50,000
No-Sufficient Fund Check 18,000
Petty Cash Fund (P16,000 in currency and
Receipts for P 84,000) 100,000
Cashier’s Check 36,000

What is the correct cash balance to be reported in the balance sheet of Lion Company
on December 31, 2020?

Problem 2
Bravo Company has supplied you with the following list of its bank accounts and cash at
December 31, 2020:
Checking account (compensating balance of
( P 15,000 with no restriction) P 48,000
Savings Account, 2% 30,000
Certificate of Deposit, 6 months, 10% due April
20, 2021 60,000
Money market (30-day certificate), current rate 9.75% 40,000
Payroll Account 20,000
Certificate of Deposits, 2 years. 12% due
February 15, 2021 75,000
Petty Cash 1,500

What should be the balance to be reported as “Cash and Cash Equivalents” in the December
31, 2020 balance sheet of Bravo Company?

Problem 3
Which of the following cash transfer would appear as a deposit in transit on the December
31, 2020 bank reconciliation?
Bank Account A Bank Account B
Disbursing Date (Month/Day) Receiving Date (Month/Day)
Per Bank Per Books Per Bank Per Books
A. 12/31 12/30 12/31 12/30
B. 1/2 12/30 12/31 12/31
 C. 1/3 12/31 1/2 1/2
D. 1/3 12/31 1/2 12/31

Problem 4

Which of the following cash transfer would not appear as an outstanding check on the
December 31, 2020 bank reconciliation?
Bank Account A Bank Account B
Disbursing Date (Month/Day) Receiving Date (Month/Day)
Per Bank Per Books Per Bank Per Books
A. 12/31 12/30 12/31 12/30
B. 1/2 12/30 12/31 12/31
C. 1/3 12/31 1/2 1/2
D. 1/3 12/31 1/2 12/31

Problem 5

The information below was taken from the bank transfer schedule prepared during the
audit of Khaye Ting Company’s financial statements for the year ended December 31, 2020.
Assume all checks are dated and issued on December 30, 2020.
Check Disbursements Receipts
No. From To Per Books Per Bank Per Books Per Bank
101 PBCom HSBC 12/30 1/4 12/30 1/3
102 UCPB Metrobank 1/3 1/2 12/30 12/31
103 HSBC PSBank 12/31 1/3 1/2 12/31
104 Metrobank PNB 1/2 1/2 1/2 12/31

Which of the following checks might indicate kiting?