Cash and Cash Equivalents Sample Problems

1.The statement of financial position of Kwarta Company shows cash of 330,820. The
following items
were found to comprise this total amount:
Checking account in Metrobank
(outstanding checks as of
year-end totaled 15,200) 105,200.00
Savings account is Far East bank 30,800.00
Petty cash fund (including expense receipts for 250) 1,500.00
Cash on hand (undeposited sales receipts) 4,200.00
Sinking fund cash 35,000.00
Cash in foreign bank (in equivalent pesos) 65,000.00

Customers' check on hand

Traveler's Check 14,000.00
Manager's Check 23,120.00
Short term treasury bills 52,000.00

What is the correct amount of cash?

2. Kuton Company’s checkbook balance at December 31, 2012 was 180,000. In

addition, Kuton held the following items in its safe on that date:

 Check payable to Kuton dated January 2, 2013 in payment of a sale made in

December 2012, included in December 31 checkbook balance - 65,000.
 Check payable to Kuton deposited December 15, but returned by the bank DAIF
- 20,000.
 Check drawn on Kuton’s account, payable to a vendor, dated and recorded on
December 30 but not yet mailed to payee as of December 31, 2012 - 15,000.

What is the correct cash balance of the company?

3. Green Company’s general ledger showed a balance of 2,205,600 in its cash account
on December 31, 2012. Included in this balance are the following items:

DAIF checks returned by bank 20,000.00

Savings account 750,000.00
IOUs 1,200.00
Postage stamps 600.00
Bank draft 10,000.00
Cash on hand 30,000.00
 Cash sinking fund 500,000.00
Customer's checks dated January 2013 5,400.00
Travel advances 4,000.00
Traveler's Checks 8,000.00

What is the correct balance of cash?

4. Jennifer Incorporated established a petty cash fund of 5,000 for incidental expenses
on June 1, 2012. At the end of the month, the count of cash on hand indicated that
670.40 remained in the fund. A review of the petty cash vouchers disclosed the
following expenses had been incurred during the month:

Office supplies 341.60

Transportation 1,321.40
Postage 780.00
Miscellaneous 837.60
Representation 1,000.00

a) What is the amount of cash shortage?

b) Prepare the adjusting entry for the end of the month.

5. In your cash count of the petty cash fund of Canyon Company as of July 4, 2012, you
found the following composition of its petty cash fund:

Bills and coins counted 2,450.00

Approved and signed petty cash vouchers
Dated June 2012 3,300.00
Dated July 1 - 4, 2012 800.00
IOU from Joe Santos, an employee 1,400.00
A check drawn by Juvy Victoria, an employee, dated July 15,
2012 2,000.00

The petty cash fund has an imprest balance of 10,000. The company’s reporting period
ends on June 30.

a. What is the correct balance of the petty cash fund?

b. How much is the cash shortage or overage?
c. Prepare the adjusting entry for June 2012