CASH AND CASH EQUIVALENTS

DO-IT-YOURSELF (DIY) DRILL

1. An entity provided the following data on December 31, 20x20:

Checkbook balance P5,000,000
Bank statement balance 4,000,000
Check drawn on entity’s account, payable to supplier, dated and recorded on December 31, 20x20 but 1,000,000
not mailed until January 31, 20x21
Cash in sinking fund 1,500,000
Treasury bills, purchased November 1, 20x20 and maturing January 31, 20x21 2,500,000
Time deposit, purchased October 1, 20x20 and maturing January 31, 20x21 2,000,000
Bitcoins/ Cryptocurrencies 100,000

What amount should be reported as cash and cash equivalents on December 31, 20x20?
A. P8,000,000 B. P8,500,000 C. P7,500,000 D. P6,000,000

2. An entity had the following cash balances on December 31, 20x20:

Cash in bank P5,000,000
Petty cash fund, all funds were reimbursed on December 31, 20x20 50,000
Money market placement or commercial papers 1,500,000
Saving deposit 800,000

Cash in bank included P500,000 of compensating balance against short-term borrowing arrangement on December 31, 20x20.
The compensating balance is legally restricted as to withdrawal. A check of P1,000,000 dated January 31, 20x21 in payment
of accounts payable was recorded and mailed on December 31, 20x20.

What amount should be reported as cash and cash equivalents on December 31, 20x20?
A. P6,350,000 B. P7,850,000 C. P6,850,000 D. P5,550,000

Use the following information for the next two (2) questions:

An entity had the following account balances on December 31, 20x20:

Cash on hand, including a customer check P100,000 dated January 31, 20x21 P500,000
Cash in bank – current account 4,000,000
Cash in bank – payroll account 1,000,000
Cash in bank – restricted account for plant addition expected to be disbursed in 20x21 500,000
Cash in sinking fund set aside for bond payable due December 31, 20x21 1,500,000
Three-month time deposit 2,000,000
Traveler’s check 200,000
Manager’s check 300,000
Money order 100,000

3. What total amount should be reported as cash under current assets?

A. P7,500,000 B. P9,500,000 C. P7,600,000 D. P6,000,000

4. What total amount should be reported as cash equivalents?

A. P2,000,000 B. P2,600,000 C. P3,500,000 D. P4,000,000

5. An entity reported an imprest petty cash fund of P50,000 with the following details:
Currencies P20,000
Coins 2,000
Petty cash vouchers
Gasoline payments for delivery equipment 3,000
Medical supplies for employees 1,000
Repairs of office equipment 1,500
Loans to employee 3,500
A check drawn by the entity payable to the order of the petty cash custodian representing salary for 15,000
the month
An employee’s check returned by the bank for insufficiency fund 3,000
A sheet of paper with names of several employees together with contribution for a birthday gift of a 5,000
co-employee. Attached to the sheet of paper is a currency of

What amount of petty cash fund should be reported in the statement of financial position?
A. P42,000 B. P27,000 C. P37,000 D. P22,000

Use the following information for the next three (3) questions:

An entity kept all cash in a checking account. An examination of the accounting records and bank statement for the month of June
revealed the following information:
 The cash balance per book on June 30 is P8,500,000.
 A deposit of P1,000,000 that was placed in the bank’s night depository on June 30 does not appear on the bank statement.
 The bank statement shown on June 30 that the bank collected noted for the entity and credited the proceeds of P950,000 to
the entity’s account, net of collection charged P50,000.
 Checks outstanding on June 30 amount to P300,000 including certified check P100,000.
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  The entity discovered that a check written in June for P200,000 in payment an account payable had been recorded in the
entity’s records as P20,000.
 Included with the June bank statement was NSF check for P250,000 that the entity had received from a customer on June
26.
 The bank statement shows P20,000 service charge for June.

6. What amount should be reported as cash in bank on June 30?

A. P9,000,000 B. P8,300,000 C. P9,360,000 D. P9,180,000

7. What is the balance per bank statement on June 30?

A. P8,300,000 B. P9,700,000 C. P8,660,000 D. P8,200,000

8. What is the net adjustment to cash in bank on June 30?

A. Net debit P950,000 B. Net credit P450,000 C. Net debit P500,000 D. Net debit P860,000

Use the following information for the next four (4) questions:

In reconciling the cash in bank of ABC Company with the bank statement balance for the month of November 20x8, the following
data are summarized:
Total books receipts –November P800,000
Bank receipts – November 900,000
Credit memo for note collection:
October 60,000
November 75,000
Credit memo for November bank loan 100,000
Deposit in transit for October 120,000
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 6,000
Debit memo for service charge – November 8,000
Erroneous book debit – November 20,000
Erroneous bank debit –November 65,000
Book disbursement – November 600,000
Bank disbursement – November 700,000
Outstanding check – October 80,000
Unadjusted bank balance on October 30 210,000
Unadjusted book balance on October 30 136,000

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

A. P80,000 B. P90,000 C. P92,000 D. P94,000

7. How much is the deposit in transit for the month of November?

A. P80,000 B. P110,000 C. P120,000 D. P130,000

8. What is the adjusted amount of receipt for the month of November?

A. P800,000 B. P825,000 C. P885,000 D. P900,000

9. What is the adjusted amount of disbursement for the month of November?

A. P500,000 B. P515,000 C. P597,000 D. P600,000

10. What is the shortage amount for the month of November?

A. P50,000 B. P15,000 C. P17,000 D. P0

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