CENTRAL MINDANAO UNIVERSITY AC 52 – Financial Accounting and Reporting

COLLEGE OF BUSINESS AND MANAGEMENT Cash and Cash Equivalents, and Accounting for Petty Cash, Bank
DEPARTMENT OF ACCOUNTANCY Reconciliation, and Proof of Cash – Unit Drill (Rematch)
Prepared by: JOHN PAUL C. ROSARIO, REA, CPA, MBA

Instructions: This rematch exam is to be done by assigned group. Make sure to answer the form before the set deadline. When you turn in
your solutions in your google classroom, submit with it your proof of collaboration. Video conference via google meet is recommended.

Read the information given and provide what is asked. Input your answers in the google form provided.

Problem 1
The following data pertain to Lincoln Corporation on December 31, 2020:
Current account at Bangko Dito P1,900,000
Current account at Bangko Doon (100,000)
Payroll account at Bangko Dyan 600,000
Foreign bank account (in equivalent pesos) 750,000
Savings account in a closed bank 150,000
Postage stamps 1,000
Employee’s post dated check 4,000
IOU from employees 10,000
Credit memo from a vendor for a purchase return 20,000
Traveler’s check 90,000
Money order 70,000
Sinking fund 2,000,000
DAIF check of customer 15,000
Customer’s check dated 1/1/21 80,000
Time deposit – 30 days 400,000
Money market placement (due 6/30/21) 500,000
Treasury bills, due 3/31/21 (purchased 12/31/20) 600,000
Treasury bills, due 1/31/21 (purchased 2/1/20) 300,000
1. How much is the total amount to be reported as cash as of December 31, 2020?
2. How much is the total amount to be reported as cash equivalents as of December 31, 2020?

Problem 2
3. Baxia Corporation had the following account balances at December 31, 2020:
Current account at Bank A P3,500,000
Savings account at Bank B restricted for bonds payable due on June 30, 2021 1,300,000
Time deposit at Bank C 3,000,000
Current account at Bank A includes P800,000 of compensating balance against short-term borrowing arrangement at December 31,
2020. The compensating balance is legally restricted as to withdrawal by Baxia. A check of P700,000 dated January 15, 2021 in payment
of accounts payable was recorded and mailed on December 31, 2020.

The total amount to be reported as ‘cash’ as of December 31, 2020 is

Problem 3
The controller for Aiah Co. is attempting to determine the amount of cash and cash equivalents to be reported on its December 31, 2020,
balance sheet. The following information is provided.
• A bank overdraft of P110,000 has occurred at one of the banks the company uses to deposit its cash receipts. At the present
time, the company has no deposits at this bank.
• A separate cash fund in the amount of P1,500,000 is restricted for the retirement of long-term debt.
• Aiah has purchased P2,100,000 of commercial paper of Caleb Company. Which is due in 60 days.
• Aiah has received a check that is dated January 12, 2021, in the amount of P125,000.
• An I.O.U. from Angie Ventura, a company customer, in the amount of P150,000.
• Commercial savings account of P600,000 and a commercial checking account balance of P800,000 are held at BDO of
Pasay. In addition, Aiah has agreed to maintain a cash balance in another checking account of P500,000 at all times at BDO
of Pasay to ensure future credit availability.
• Currency and coin on hand amounted to P7,700.
• Money market fund account held at Nyoy Co. (a mutual fund organization) permits Aiah to write checks on this balance,
P5,000,000.
• Petty cash fund of P1,000. Unreplenished expenses on the petty cash amounts to P400.
• The company has two certificates of deposit, each totaling P500,000. One of the CDs have a maturity of 75 days, while the
other has 120 days.
• Travel advances of P180,000 for executive travel for the first quarter of next year (employee to reimburse through salary
reduction).

4. How much is the total amount to be reported as cash as of December 31, 2020?
5. How much is the total amount to be reported as cash equivalents as of December 31, 2020?
Problem 4
In the morning of January 3, 2022, you were tasked to determine the petty cash fund balance of LittleField Technology for the year
ended December 31, 2021. You began to count a 9:00 AM in the presence of J. Brown, the petty cash custodian. In the course of your
counting, you found the following items:

Bills
10 two-hundreds, 20 one-hundreds, 40 twenties

Coins
10.00 10 rolls (10 pieces to a roll)
5.00 9 rolls (50 pieces to a roll)
1.00 8 rolls and 4 loose (100 pieces to a roll)
0.25 7 rolls and 10 loose (200 pieces to a roll)
0.10 5 rolls and 20 loose (300 pieces to a roll)
0.05 4 rolls and 10 loose (200 pieces to a roll)

Checks
Maker Date Payee Amount

Joe Manalo, Manager 12/05/21 LittleField Technology 900

J. Brown, petty cash custodian 12/28/21 LittleField Technology 700

Note: Jose Manalo’s check was returned on December 29, 2021 for insufficiency of fund.

I.O.U’s Date Amount

J. Black, janitor 12/10/2021 245

J. White, clerk 12/20/2021 120

J. Snow, Bookkeeper 12/22/21 220

Petty cash vouchers for replenishment:

Payee Date Account Charged Amount

J. Knight, messenger 12/14/2021 Advances to employees 135

Color bookstore 12/15/2021 Supplies 145

Blue Liner 12/10/2021 Freight-out 186

Post Office (stamps) 12/20/2021 Supplies 335

J. Storm, carpenter 12/21/2021 Repairs 412

J. Green 1/02/2022 Miscellaneous expense 148

Unused stamps:
Various denominations 50

Additional information:
a. The balance of the petty cash per books as of January 3, 2022 before any adjustment is P16,000.
b. Cash sales of January 2, 2022 amounted to P9,500 per sales records, while cash receipts book and deposit slip showed that
only P7,800 was deposited in the bank on January 3, 2022.
c. The following employees’ pay envelopes have been opened and the money removed. Each envelope was marked
“unclaimed”.
J. Park 800
J. Kim 600

CASE 1: The petty cash fund is an imprest cash fund

6. How much is the adjusted petty cash fund on December 31, 2021?
7. How much was the cash (over) short on December 31, 2021?
CASE 2: The petty cash fund is a fluctuating fund
8. How much was the initial balance of the fund before disbursements?
Problem 5
In the morning of January 3, 2022, you were tasked to determine the petty cash fund balance of LittleField Technology for the year
ended December 31, 2021. You began to count a 9:00 AM in the presence of J. Brown, the petty cash custodian. In the course of your
counting, you found the following items:

Bills
10 two-hundreds, 20 one-hundreds, 40 twenties

Coins
10.00 10 rolls (10 pieces to a roll)
5.00 9 rolls (50 pieces to a roll)
1.00 8 rolls and 4 loose (100 pieces to a roll)
0.25 7 rolls and 10 loose (200 pieces to a roll)
0.10 5 rolls and 20 loose (300 pieces to a roll)
0.05 4 rolls and 10 loose (200 pieces to a roll)

Checks
Maker Date Payee Amount

Joe Manalo, Manager 12/05/21 LittleField Technology 900

J. Brown, petty cash custodian 12/28/21 LittleField Technology 700

Note: Jose Manalo’s check was returned on December 29, 2021 for insufficiency of fund.

I.O.U’s Date Amount

J. Black, janitor 12/10/2021 245

J. White, clerk 12/20/2021 120

J. Snow, Bookkeeper 12/22/21 220

Petty cash vouchers for replenishment:

Payee Date Account Charged Amount

J. Knight, messenger 12/14/2021 Advances to employees 135

Color bookstore 12/15/2021 Supplies 145

Blue Liner 12/10/2021 Freight-out 186

Post Office (stamps) 12/20/2021 Supplies 335

J. Storm, carpenter 12/21/2021 Repairs 412

J. Green 1/02/2022 Miscellaneous expense 148

Unused stamps:
Various denominations 50

Additional information:
a. The balance of the petty cash per books as of January 3, 2022 before any adjustment is P16,000.
b. Cash sales of January 2, 2022 amounted to P9,500 per sales records, while cash receipts book and deposit slip showed that
only P7,800 was deposited in the bank on January 3, 2022.
c. The following employees’ pay envelopes have been opened and the money removed. Each envelope was marked
“unclaimed”.
J. Park 800
J. Kim 600

On January 15, 2022, you were tasked to check again the petty cash fund so the company can write a check to replenish the fund.
Upon checking, you found the following:
Bills
2 two-hundreds, 4 one-hundreds, 10 twenties
Coins
10.00 8 rolls (10 pieces to a roll)
5.00 8 rolls (50 pieces to a roll)
1.00 7 rolls and 40 loose (100 pieces to a roll)
0.25 6 rolls and 100 loose (200 pieces to a roll)
0.10 4 rolls and 200 loose (300 pieces to a roll)
0.05 2 rolls and 100 loose (200 pieces to a roll)

Petty cash vouchers for replenishment:

Payee Date Account Charged Amount

J. Green 1/02/2022 Miscellaneous expense 148

Rainbow bookstore 1/04/2022 Supplies 750

Indigo Liner 1/08/2022 Freight-out 1,076

J. Cloud, carpenter 1/10/2022 Repairs 580

Additional information:
a. The check of J. Brown was encashed and the proceeds was retained in the fund.
b. The check of Joe Manalo was successfully encashed. The proceeds of which was retained in the fund.
c. Cash sales from January 4-14, 2022 amounted to P21,000 per sales records, while cash receipts book and deposit slip
showed that only P19,700 was deposited in the bank on January 15, 2022.
d. An enveloped which is sealed had a mark saying “collections for alms – P945”.

CASE 1: The petty cash fund is an imprest cash fund

9. How much is needed to replenish the fund?
10. How much is the January cash (over) short?
11. How much is the total (overage) shortage of the fund prior to replenishment?
12. How much was credited to petty cash fund upon replenishment?

CASE 2: The petty cash fund is a fluctuating fund

13. How much is the book balance of the fund prior to adjustment and replenishment?
14. If the company rights a check for P15,000, how much increase (decrease) did the fund have comparing to its balance prior to all
disbursements?
15. If the company rights a check for P15,000, how much is the new balance of the petty cash fund?

Problem 6
In reconciling the Cash in bank of Inner Company with the bank statement balance for the month of November 2022, the following data
are summarized:
Total book receipts - November P900,000
Bank receipt - November 1,000,000
Credit memo for note collection:
October 65,000
November 75,000
Credit memo for November bank loan 100,000
Deposit in transit for October 125,000
Erroneous bank credit for November 25,000
Erroneous bank credit for October corrected by bank in November 50,000
Erroneous book credit during November 5,000
Erroneous book credit during October corrected by the Company during November 10,000
Debit memo for service charge - October 10,000
Debit memo for service charge – November 8,000
Erroneous book debit – November 20,000
Erroneous bank debit – November 65,000
Book disbursement – November 500,000
Bank disbursement – November 600,000
Outstanding check – October 84,000

Adjusted cash balance as of November 2022 is P2,500,000.

16. What is the amount of outstanding checks for November?

17. How much is the deposit in transit for the month of November?
18. What is the adjusted amount of receipt for the month of November?
19. What is the adjusted amount of disbursement for the month of November?
20. How much is the adjusted cash balance in October?
21. How much is the unadjusted book balance in October?
22. How much is the unadjusted book balance in November?
23. How much is the unadjusted bank balance in October?
24. How much is the unadjusted bank balance in November?
25. Assuming instead that the actual outstanding checks amounts to P50,000, how much is the cash shortage (overage)?

Problem 7
In preparing its bank reconciliation on December 31, 2022, Shaun Company had made available the following information:
Balance per bank statement 390,750
Deposit In transit 50,000
Outstanding checks 76,500
Amount erroneously credited by bank to Shaun’s Account 8,000
Bank service charge for December 750
Check drawn, dated and recorded December 31, 2022, but
Not mailed until January 10, 2022 (included
In total outstanding checks above) 9,000
Check Shane Company charged by bank to the account of
Shaun Company 12,000

26. What is the amount shown as cash on Shaun’s December 31, 2022 statement of financial position?
27. What is the unadjusted cash in bank per books on December 31, 2022?
28. What is the net increase (decrease) in cash account as a result of adjustments?

Problem 8
The review of bank reconciliation of J Inc. is shown below.
J Inc.
Bank Reconciliation
December 31, 2022

Balance per ledger P 35,000

Add: Collections received on the last day of December and charged to
“Cash in Bank” on books but not deposited 7,100
Debit memo for customer’s NSF checks (check is on hand but no
Entry has been made on the books) 2,000
Debit memo for bank service charge for December 900

Deduct: Outstanding checks (see details below) P 19,300

Credit memo for proceeds of a note receivable which
Had been left at the bank for collection but
Which has not been recorded as collected 6,900
Check for an account payable entered in the books as
P9,800 but drawn and paid by the
bank as P13,000 3,200 29,400
Computed balance P 15,600
Unallocated difference 36,600
Balance per bank (check confirmation) 50,000

List of Outstanding Checks

December 31, 2022
Check No. Amount

1000 P6,800

1001 1,200

1002 2,500

1003 3,000

1004 3,800

1005 4,000

Total P19,300

29. How much is the correct outstanding checks at December 31, 2022?
30. How much is the adjusted cash balance at December 31, 2022?