DISCUSSION EXERCISES

Problem 1

On December 31, 2021, BSA Corp reported the following as the composition of its Cash
and Cash Equivalents line item in its Statement of Financial Position:

Cash on hand P300,000

Cash in bank – URSA Bank 400,000
Cash in bank – MOGUL Bank (30,000)
Manager’s check 50,000
Time deposit – URSA Bank 2,000,000
Postage stamps 10,000
Escrow deposit 100,000
Demand deposit – VOID Bank 300,000
Payroll account – VOID Bank 500,000
Treasury note 50,000
Treasury shares 90,000
Treasury bills purchased 12/25/2021 maturing 4/1/2022 120,000
Cash in bank – DOTA Bank 300,000
Cash in bank – MOBA Bank 150,000
Money market placement due 6/2/2022 100,000
Money market placement due 2/5/2022 80,000
Revolving fund 40,000
Contingency fund 30,000
Payroll fund 100,000
Dividend fund 40,000
Fund for acquisition of PPE 200,000
Unused credit line 100,000
Postdated check, customer 60,000
IOUs from employees 90,000
Foreign bank account – unrestricted (in equivalent pesos) 200,000
Petty cash fund 50,000
Traveler’s check 200,000

Additional information:

a. Accounts payable of 16,400 was paid in January 2022. The payments on which a
P1,400 cash discount has been takin were recorded on cash on hand in the
December 31, 2021.
b. Drawn against cash in URSA Bank were check amounting to P40,000 dated
December 26, 2021 still on one of the drawer of the accountant in the treasury
department.
c. Demand deposit to VOID bank is restricted for the company’s plant expansion
next year.
d. Cash in bank in MOBA Bank includes restricted compensating balance of P50,000
for short-term borrowing arrangement.
e. The petty cash fund included unreplenished December 2021 petty cash expenses
vouchers of P15,000.

Determine the amount of cash for the year ended 2021.

Determine the amount to be reported under Cash and Cash Equivalents line item it the
Statement of Financial Position as of December 31, 2021.
Problem 2

The following information was provided by RAIGOR Inc. in preparing its current month’s
bank reconciliation:

Balance per bank statement 9/30/2021

Outstanding checks (with certified check of P100,000)
Deposit placed in the bank’s night depository on September 30
Bank service charge
Proceeds of bank loan not recorded by RAIGOR
Customer’s check charged by the bank due to lack of counter
signature
Amount erroneously credited by bank to RAIGOR’s account
A supplier check for P10,000 was incorrectly recorded by RAIGOR as
Notes collected by the bank for RAIGOR
A customer check for P150,000 was incorrectly recorded by RAIGOR as
NSF checks not recorded on books nor redeposited
Checks of RIGID Corp. charged by the bank to RAIGOR Inc.
Deposit of RAIGOR Inc. credited by the bank to RAIGEE Inc.
Check issued by RAIGOR charged by the bank to RAINOR Corp.

Determine the adjusted cash in bank balance and unadjusted cash balance per book.

Problem 3

Able Company received the bank statement for the month of March. However, the
closing balance of the account was unreadable.

Attempts to contact the bank after hours did not secure the desired information.

February 28 book balance P1,460,000

Note collected by the bank 100,000
Interest earned on note 10,000
NSF check of customer 130,000
Bank service charge on NSF 2,000
Other bank service charges 3,000
Outstanding checks 200,000
Deposit of Feb 28 placed in night depository 85,000
Check issued by Axle Company charged to Able’s account 20,000

Determine the cash balance per bank statement.

Determine the adjusted cash in bank balance.