Chapter 1 Cash and Cash Equivalents Problem 1-1 (IAA) 1. Prepare adjusting entries on December 31, 2021 Dec31 Accounts Receivable 200,000 Cash in Bank 200,000 Cash in Bank 250,000 Accounts Payable 250,000 Cash in Bank 100,000 ‘Accounts Payable 100,000, Accounts Receivable 450,000 Cash in Bank 450,000 2, Compute the total amount of cash and cash equivalents that should be reported on December 31, 2021 Cash in Bank 3,000,000 Stale Customer Check (200,000) Undelivered creditor's check 250,000 Post-dated creditor's check 00,000 2022 collection recorded in 2021 480.000) Total 2,700,000 Time Deposit-30 days 4,000,000 Petty Cash Fund 20,000 Cash and Cash Equivalents 3,720,000 3. Explain the presentation of the items excluded from cash and cash equivalents. ‘The money market placement account was excluded in the computation of cash and cash equivalent because as we could have observed its maturity period is more than three months but within a year hence, itis classified as short term financial asset or temporary sister. The saving depos closed bank is as well an excluded item from the cash and cash equivalent because it classifies as other non-current asset, given that it is deposited in a closed bank. Likewise 19 fund for bond payable was excluded in the computation because its term is more than a year thus, it is classified as. long-term investment. Problem 1-2 (IAA) 1. prepare adjusting entries on December 31, 2021. Dec31 Accounts Receivable 150,000 Cash on Hand 150,000 Expenses 10,000 Receivable from Employee 5,000 Petty Cash Fund 15,0002. Compute the total amount of cash and cash equivalents. Cash on Hand 1,000,000 Postdated customer check 150.000) Adjusted Cash on Hand 850,000, Petty Cash Fund 50,000 Unrepienished Petty Cash Fund (10,000) Postdated employee check 5 000) Adjusted Petty Cash Fund 36,000 Cash on Hand 850,000 Petty Cash Fund 35,000 Security Bank current account 2,000,000, PNB current account 41'500,000 Bond sinking fund 2,500,000 Total Cash and Cash Equivalent 6,885,000 3. Explain the presentation of the items excluded from cash and cash equivalents The BDO current account was excluded because it is an overdraft thus, itis considered as current liability BSP treasury bills was not also considered as a cash and cash equivalent, but rather, itis classified as a temporary investment as it matures more than three months but within a year. Even though the BPI time deposit matures for 90 days, it does not classify as cash and cash equivalents since it was set aside for the acquisition of land. Problem 1-3 (IAA) 1. Prepare adjusting entries on December 31, 2021. Dee 31 Accounts Receivable 100,000 ‘Cash on hand 100,000 Accounts Receivable 150,000 ‘Cash on hand 150,000 Advances to employees 10,000 Cash short 5,000 Petty cash fund 15,000 Cash in Bank 200,000 Accounts payable 200,000 Cash in Bank 300,000 Accounts payable 300,000, 2. Compute the total cash on December 31, 2021. Cash on hand 1,000,000 NSF customer check (100,000) Postdated customer check 150,000) Adjusted on hand 750,000Currency and coins 2,000 Check drawn payable to petty cashier 33,000 Adjusted Petty Cash 35,000 Cash in Bank 4,000,000 Undelivered company check ‘200,000 Postdated company check delivered 300.000 Adjusted Cash in Bank 4,500,000 Cash on hand 750,000 Petty Cash Fund 36,000 Cash in ank 4,500,000 Saving Deposit 2.000.000. Total Cash 1.285.000 Problem 1-4 (PHILCPA Adapted) 41. Compute the total cash and cash equivalents, Cash on hand 200,000 NSF customer check (35,000) Postdated customer check (15,000) ‘Adjusted cash on hand 150,000, Petty Cash Fund - Currency and coins 8,000 Philippine Bank current account 5,000,000 Undelivered company check 25,000 Postdated company check delivered 45.000 Adjusted balance 5,070,000 Cash on Hand 150,000 Petty Cash Fund 5,000 Philippine Bank current account 5,070,000 City Bank current account No. 1 4,000,000 City Bank current account No. 2 (100,000) Asia Bank saving deposit ‘250,000 Asia Bank time deposit, 2.000.000 Total Cash and Cash Equivalents 11,375,000 2. Prepare adjusting entries on December 31, 2021. Dec 31 Accounts Receivable ‘Cash on hand Receivable from Officer Expenses Cash short Petty cash fund Philippine Bank Current Accounts Payable City Bank Current Bank overdraft 35,000 2,000 12,000 1,000 25,000 45,000 36,000 1,000 25,000 45,000Problem 1-5 (ACP) 1. Prepare journal entries to record the transactions under fluctuating fund system, Petty Cash Fund Cash in Bank Postage Supplies Transportation Miscellaneous Expenses Petly Cash Fund Petty Cash Fund Cash in Bank 10,000 10,000 41,500 5,500, 4,200 ‘800 9,000 14,000 14,000 2. Prepare journal entries to record the transactions imprest fund system, Petty Cash Fund Cash in Bank Petty Cash Fund Postage ‘Supplies ‘Transportation Miscellaneous Expenses Cash in Bank Problem 1-6 (ACP) 10,000 10,000 5,000 4,500 5,500, 4,200 ‘200 14,000 1, Prepare journal entries to record the transactions under fluctuating fund system, Petty Cash Fund Cash in Bank Postage Supplies Petty Cash Fund Transportation Accounts Payable Petty Cash Fund Petty Cash Fund Cash in Bank 410,000 10,000 4,500 3,000 4,500 4,000 3,500 4,500 19,000 19,000 2, Prepare journal entries to record the transactions imprest fund system, Petty Cash Fund Cash in Bank Petty Cash Fund Postage Supplies ‘Transportation Accounts Payable 10,000 10,000 10,000 4,500 3,000, 4,000 3,500Cash in Bank 19,000 Problem 1-7 (IAA) 1. Prepare journal entries to record the transactions under imprest fund system. May2 Petty cash fund 10,000 Cash in bank 10,000 29 Postage 4,000 Supplies 3,000 Transportation 2,500 Miscellaneous Expense 11500 Petty cash fund 8,000 June 30 Supplies 2,000 Postage 4,000 ‘Transportation 4,000 Petty Cash Fund 4,000 July 18 Petty cash fund 5,000 Supplies 3,500 Postage 1,500 ‘Transportation 1,500 Miscellaneous Expense 500 Cash in bank 12,000 2. Prepare journal entries to record the transactions fluctuating fund system, May 2 Petty cash fund 10,000 Cash in bank 10,000 28 Postage 4,000 Supplies 3,000 Transportation 2.500 Miscellaneous Expense 1,500 Petty cash fund 8,000 Petty cash fund 8,000 Cash in bank 8,000 June 30 Supplies 2,000 Postage 1,000 Transportation 4,000 Petty cash fund 4,000 July 1 Petty cash fund 4,000 Supplies 2,000 Postage 4,000 Transportation 1,000 To reverse the adjustment made on June 30 July 15 Supplies 1,500 Postage '500 ‘Transportation 500 Miscellaneous Expense 500 Petty cash fund 3,000Petty cash fund 12,000 Cash in bank 12,000 Problem 1-8 (IAA) 1. Prepare journal entries to record the transactions. Petty Cash Fund 10,000 Cash in Bank 10,000 Petty Cash Fund 10,000 Postage 2,000 Supplies 5,000 Cash in Bank 17,000 Supplies 4,000 Postage 3,000 ‘Special Deposit 2,000 Petty Cash Fund 9,000 Petty Cash Fund 9,000 ‘Supplies 4,000 Postage 3,000 Special Deposit 2,000 Supplies 6,000 Postage 5,000 Accounts Payable 7,000 Cash Short or Over 4,000 Cash in Bank 19,000 Problem 1-9 (IAA) 1. Prepare journal entries to record the transactions. Petty Cash Fund 10,000 Cash in Bank 410,000 Distribution Cost 5,000 Miscellaneous Expense 2,000 Equipment 2000 Cash in Bank 9,000 Receivable from Employee 2,000 Distribution Cost 1°50 Transportation 500 Petty Cash Fund 4,000 Petty Cash Fund 4,000 Receivable from Employee 2,000 Distribution Cost 4500 Transportation 500 Distribution Cost 2,000 ‘Administrative Expense 2,000 Transportation 1'500 Accounts Payable 1.200Cash in Bank 6,700 2. How much is the petty cash on January 31, 2022 before the replenishment? Petty Cash, December 1, 2021 10,000 Distribution Costs (1,500 + 500) (2,000) Transportation (500 + 1,000) (11500) Administrative Expenses (2,000) Payment for Supplier's Invoice 1.200) Petty Cash Before Replenishment _3;300 Problem 1-10 (AICPA Adapted) C, 4,600,000 Cash in checking account 360,000 Cash in money market account 750,000 Treasury bill purchased November 1, 2021 3.500.000 ‘maturing January 31, 2022 Total cash and cash equivalents 4,600,000 Problem 1-11 (IAA) D, 5,000,000 Cash on hand 500,000 Demand deposit 4,000,000 Petty cash fund 50,000 Traveler's check 200,000 Manager's check 400,000 Money order 150,000 Total Cash 15,000,000 Problem 1-12 (PHILCPA Adapted) €.7,010,000 Checking Account at Metrobank 3,000,000 Foreign Bank Account Unrestricted 2,500,000 Petty Cash Fund (50,000-40,000) 10,000 Value Added Tax Account 4.500,000 Unrestricted Cash 7,010,000 Problem 1-13 (PHILCPA Adapted) B.3,950,000 Petty Cash Fund 50,000 Undeposited Receipts (1,500,000+100,000) 4,400,000 Cash in Bank 2,800,000 Cash at Year-End 3,950,000 Problem 1-14 (AICPA Adapted) ‘A.4,500,000 Checkbook balance 4,000,000 Undelivered check drawn on Thor's account 800.000 Adjusted Cash Balance 4,500,000 Problem 1-15 (AICPA Adapted) D. 7,440,000 Petty Cash Fund 50,000 Unreplenished Petty Cash Fund (6.000) Postdated Employee Check (6.000) Cash on Hand 500,000 Postdated customer check (100,000) Cash in Bank — current account 4,000,000Cash in Bank ~ payroll account Time Deposit Total Cash and Cash Equivalents Problem 1-16 (AICPA Adapted) B. 9,150,000 Cash in bank (6,000,000 - 400,000) Petty cash fund Time deposit Saving deposit Total Cash Problem 1-17 (AICPA Adapted) . 2,375,000 Cash in bank Cash on hand Total Cash Problem 1-18 (IAA) B. 5,150,000 Petty Cash Fund Current account - First Bank (4,000,000 + 190,000) Money market placement Total Cash and Cash Equivalents Problem 1-19 (IAA) D. 8,050,000 Undeposited collections BDO checking account BDO payroll fund BDO money market BDO value added tax account Total Cash and Cash Equivalents Problem 1-20 (AICOA Adapted) A. 4,800,000 Checkbook balance NSF customer check Undelivered company check Adjusted cash balance Problem 1-21 (IAA) ‘A. 6,800,000 Cash — Coin, currency, saving and checking Government treasury bills Commercial papers Total cash and cash equivalents Problem 1-22 (AICPA Adapted) 1.4,12,180,00 Cash on Hand Undelivered Check Delivered Postdated Check Security Bank Current Account Manila Bank Current Account No. 1 Manila Bank Current Account No. 2 BDO Account for Bonds Payable Total Cash 4,000,000 2.000.000 1,440,000 5,600,000 50,000 2,500,000 4.000.000 9,150,000 2,250,000 50,000 4,100,000 4.000.000 5,150,000 600,000 4,000,000 4,000,000 2,000,000 ‘450,000 8,050,000 5,000,000 (600,000) 300.000 4,800,000 3,400,000 2,000,000 4.500.000. 6,900,000 400,000 100,000, 150,000, 5,000,000 4,000,000 (600,000) 3,000,000 142,150,0002.A,3,000,00 United Bank Time Deposit Treasury Bills Total Cash Problem 1-23 (ACP) B. 4,200,000 Checkbook balance Postdated customer check erroneously included Undelivered check payable to supplier Adjusted cash in bank A. 4,645,000 Cash in bank ‘Cash on hand ~ undeposited collections Petty cash fund Total cash Problem 1-24 (PHILCPA Adapted) c. 37,000 Coins and currencies Check drawn to the order Petty Cash Fund Problem 1-25 (PHILCPA Adapted) ©. 6,000 Coins and currency Check drawn by the entry to the order Correct amount of petty cash Problem 1-26 (PHILCPA Adapted) 1.4.2,000 over Coins and Currency Petty Cash Vouchers for Expenses Petty Cash Fund Cash Over 2.8. Miscellaneous Expenses 46,000 Cash in Bank Cash Short or Over 2,000,000 41,000,000 3,000,000 4,000,000 (200,000) $00,000 200,000 4,200,000 400,000 45.000 4,645,000 6,000 46,000 (50,000) 44,000 2,000