CASH AND CASH EQUIVALENTS

PROBLEM 1
The Subsidiary Ledger of Cash in Bank account of SUN Company as of December 31, 2022 composed of the following:
BPI current account No. 897 P1,000,000
BDO current account No. 7383 2,500,000
RCBC savings account No. 000-637 1,500,000
Metrobank savings account No. 928 4,000,000
UCPB payroll account 3,000,000
Union bank time deposit No. 101 2,000,000
BPI current account No. 898 (100,000)

Additional information:
a. The RCBC account is restricted for the payment of Notes Payable due March 1, 2023.
b. Metrobank account is restricted for the payment of Bonds Payable due March 1, 2024.
c. The UCPB account is restricted for the payment of Salaries of the employees.
d. The Union bank account is restricted for the purchase of an Equipment to be disbursed within 2 months.

Question: What is the total amount of "Cash and Cash equivalents" to be presented in the 2022 Statement of Financial Position?

PROBLEM 2
The Cash Account of MOON Company for December 31 are as follows:

Current account P2,000,000

Savings account 1,000,000
Time deposit 3,000,000
Insurance fund 500,000
Financial asset at fair value 200,000
Sinking fund 2,500,000
Undeposited collection 200,000
Traveler’s checks 100,000
Bank draft 150,000
Postal money order 250,000
Value added tax fund 400,000
Contingency fund 600,000
Change fund 100,000
Cash in US Dollar with foreign exchange restriction
(in equivalent Philippine Peso) 500,000
SM Commercial papers 400,000

Question: What is the amount of "Cash"?

PROBLEM 3
The financial records of EARTH Company for December 31, 2022 provided the following:

Cash in bank P4,000,000

Petty cash fund (currency and coins, P5,000; expenses, P45,000) 50,000
Treasury bill 500,000
Money market placement / instrument (purchased on 10/15/22,
will mature on 3/15/23) 800,000
Cash surrender value 200,000
Certificate of deposit - 3% 400,000
Sinking fund (restricted for the payment of bonds payable) 900,000
Notes payable to bank 200,000
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Bonds payable (due 12/20/23) 1,000,000
Retained earnings 3,000,000
Retained earnings restricted for plant expansion 400,000

The Cash in bank includes a P200,000 compensating balance against short term borrowing. The compensating balance is restricted as to
withdrawal.

Question: In the December 31, 2022 Statement of Financial Position, EARTH should report Cash of

PROBLEM 4
The accounting records of MERCURY Company as of December 31, 2022 are as follows:

Cash in bank - First bank P1,400,000

Cash in bank - Second bank (200,000)
Cashier’s check 100,000
Pension fund 350,000
Customer’s checks outstanding for 12 months 280,000
Undeposited collections 400,000
Petty cash fund 20,000
Post-dated customer checks 700,000
Listed equity securities 200,000

a. Included in the undeposited collections is a customer's check amounting to P50,000 returned by the bank on 12/20/2022 due
to insufficient fund but subsequently redeposited and cleared by the bank on 1/8/2023.

b. On January 5, 2023, the Company collected P200,000 of accounts receivable and deposited it to First bank. On January 10,
2023, the Company issued a check against First bank for the payment of an accounts payable amounting to P100,000 subject to a 5%
purchase discount. The discount was availed by the Company. Both transactions were recorded in the 2022 accounting records.

c. On December 28, 2022, the Company drawn and recorded a creditor's check against Second bank amounting to P500,000 but
the check was only mailed on January 7, 2023.

d. The Petty cash fund composed of the following:

Currency and coins 3,000

Unpaid vouchers 4,000
Replenishment check 7,000
Employees’ vales 5,000
Cash in sealed envelope marked “Paluwagan” 2,000

Question: What is the total amount of cash and cash equivalents as of December 31, 2022?

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PROBLEM 5
The controller for VENUS Company is attempting to determine the amount of cash to be reported on the December 31, 2022 statement
of financial position.

The following items are included in the Cash in Bank items of VENUS Company:

BDO Special Checking account used for payroll payments P 500,000

BPI Special Checking Account used as a bond sinking fund 400,000
MBTC Checking account (per ledger), Checks of P 80,000 are outstanding
as of December 31, 2023 300,000
DBP, Checking Account (per bank statement) of P 50,000 is outstanding
as of December 31, 2023 600,000
EWB, includes a P100,000 Compensating Balance maintained in relation to a short-
term loan 1,000,000
PNB, includes a P200,000 Compensating Balance maintained in relation to a long-term
loan arrangement 1,000,000
Checking Accounts in LBP
CA-000-111111 P600, 000
CA-000-111112 (250,000) 350,000
BBC, (bank under liquidation), realizable value was P0.75 of every deposit 200,000
ILM, Current Account (50,000)
1-year Treasury Note, maturity date January 31, 2023 600,000
1-year Treasury Note, maturity date on January 31, 2023
(acquired November 28, 2022) 800,000
90-Day Central Bank Treasury Bills 450,000
ABC, US-Dollar Denominated Deposit (opened in October 17); exchange rate on
October 17 was P40; average (October 17-December 31) was P50;
December 31 was P45 $ 20,000

Question: The amount to be reported as Cash and Cash Equivalents in VENUS Company’s December 31, 2022

PROBLEM 6
You were able to gather the following from the December 31, 2022 trial balance of MARS INC. in connection with your audit of the
company:
Petty cash fund P 25,000
Cash on hand 750,000
Cash in bank – Metrobank current 2,000,000
Cash in bank – BDO Acct. No. 1 1,580,000
Cash in bank – BDO Acct. No. 2 (80,000)
Cash in bank – Coco bank savings 2,250,000
Time deposits – BPI 1,000,000

The petty cash fund consisted of the following items as of December 31, 2022:
Currency and coins P 5,000
Employees’ vales 4,000
Currency in an envelope marked “collections for charity”
with names attached 3,000
Unreplenished petty cash vouchers 3,250
Check drawn by MARS, payable to the petty cashier 10,000
Unused postage stamps 750
Total P 26,000

Cash on hand represents undeposited collections as of December 31, 2022 and includes the following items:
a. Customer’s check for P80,000 returned by bank on December 26, 2022 due to insufficient fund but subsequently
redeposited and cleared by the bank on January 3, 2023.
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 b. Customer’s check for P40,000 dated January 2, 2022, received on December 29, 2022.
c. A customer check for P45,000 dated June 1, 2022 received on the same date and yet to be deposited since the same has
been missing.
d. Postal money orders received from customers, P50,000.

Included among the checks drawn by MARS against the Metrobank current account and recorded in December 2022 are the following:
a. Check written on December 29, 2022 dated January 2, 2023, delivered to payee on December 29, 2022, P80,000.
b. Check written and dated December 29, 2022 and delivered to payee on January 2, 2023, P100,000.

The credit balance in the BDO Current Account No. 2 represents checks drawn in excess of the deposit balance. These checks were still
outstanding at December 31, 2022.

The savings account deposit in Coco bank has been set by the board of directors for acquisition of new computers. This account is
expected to be disbursed in the next 3 months from the balance sheet date.

The time deposit with BPI was purchased on November 1, 2022 and shall mature on November 1, 2023.

Compute for the following:

1. Petty cash fund

2. Petty cash shortage/overage
3. Cash on Hand
4. Cash in Bank – Metrobank account
5. Cash and Cash Equivalents to be reported in Statement of Financial Position

PROBLEM 7
The petty cash fund of SATURN Company showed the following items:

Currency and coins P10,000

Petty cash vouchers
Supplies 1,000
Postage 3,000
Transportation 4,500
Advances to employees 3,500
Check drawn by SATURN payable to the order of the
petty cash custodian 5,000
Postage stamp 1,000
An envelope containing currency as a gift for a newly wed employee 3,000

The petty cash custodian’s accountability is P30,000.

Q1. What is the adjusted balance of the petty cash fund?

Q2. How much is the Cash Short or Over?

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PROBLEM 8

The ledger account of NEPTUNE Company showed a ledger balance of P1,800,000 on December 31, 2022. The bank
statement as of that date showed a balance of P2,100,000. Upon comparing the statement with the cash records, the
following facts were determined:
a. There were bank service charges for December of P10,000.
b. A bank memo stated that PLUTO Inc.’s note for P200,000 and interest of P20,000 had been collected on December
29, and the bank has made a charge of P5,000 on the collection. No entry had been made in NEPTUNE’s books
when PLUTO’s note was sent to the bank for collection.
c. Receipts for December 31 for P550,000 were not deposited until January 2.
d. Checks outstanding on December 31 totaled P325,000.
e. The bank had charged the NEPTUNE’s Company’s account for a customer’s uncollectible check amounting to
P43,000 on December 29.
f. A customer’s check for P900,000 had been entered as P600,000 in the cash receipts journal by NEPTUNE on
December 15.
g. Check no. 777 in the amount of P141,000 had been entered in the cash book as P114,000, and check no. 799 in the
amount of P10,000 had been entered as P100,000. Both checks had been issued to pay for purchases of equipment.

Question: What is the amount of cash to be shown in the December 31, 2022 statement of financial position