Answer: A Cash in Bank - Tsunami Bank P432,710 Petty Cash Fund 10,250 Time Deposit 1,000,000

PROBLEM 1-1
The cash account of the MELLOW Inc. as of December 31, 2017 consists of the following:
On deposit in current account with Real Bank P 900,000

Cash collection not yet deposited to the bank 350,000
A customer’s check returned by the bank for insufficient Fund 150,000
A check drawn by the Vice-President of the Corporationdated January 15, 2013 70,000
A check drawn by a supplier dated December 28, 2017 for
goods returned by the Corporation 60,000
A check dated May 31,2017 drawn by the Corporationagainst the Piggy Bank
in payment of customs duties. Since the importation did not materialize, the
check was returned by the customs broker. This check was an outstanding check
in the reconciliation of the Piggy Bank account 410,000
Petty Cash fund of which P5,000 is in currency; P3,600 in form of employees’
I.O.U. s; and P1,400 is supported by approved petty cash vouchers for expenses
all dated prior to closing of the books on December 31, 2017 10,000
Total P1,950,000
Less: Overdraft with Piggy Bank secured by a Chattel (300,000)
Balance per ledger P1,650,000
At what amount will the account “Cash” appear on the December 31,2017 balance sheet?
a. P1,425,000
b. P1,495,000
c. P1,315,000
d. P1,725,000
PROBLEM 1-2
Answer: A
Cash in bank – Tsunami Bank
P432,710
Petty cash fund 10,250
Time deposit 1,000,000
Money market placement
4,000,000
Cash and cash equivalents
P5,442,960
Answer: D
Page 8
Problem 1-2
Computation of Correct Cash
Balance
The following are the cash
balances of LEONOR, INC. at
December 31, 2010:
Undeposited collections (in
currency and coins)P40,200
Current account –
unrestricted 620,000
Disbursement checks written
and recorded in
December 2010 but are
to be released to the
Payees in January 2011
130,000
Restricted time deposits
(expected use in
June 2011)
2,000,000
Leonor, Inc. has agreed to
maintain a P200,000
compensating
balance in its unrestricted
current account in accordance
with the loan covenant.
How much should Leonor, Inc.
report as ash on its December
31,
2010, statement of financial
position?
A. P590,200 C. P790,200
B. P2,790,200 D. P750,000
Computation of Correct Cash Balance
The following are the cash balances of AWESOME, INC. at December 31, 2010:
Undeposited collections (in currency and coins) P40,200

Current account – unrestricted 620,000
Disbursement checks written and recorded in December 2010 but are
to be released to the Payees in January 2011 130,000
Restricted time deposits (expected use in June 2011) 2,000,000
AWESOME, Inc. has agreed to maintain a P200,000 compensating balance in its unrestricted current
account in accordance with the loan covenant. How much should Leonor, Inc. report as ash on its
December 31, 2010, statement of financial position?
A. P590,200
B. P790,200
C. P2,790,200
D. P750,000
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?
PROBLEM 1-3
The statement of financial position of Nas 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

Savings account is Far East bank 30,800
Petty cash fund (including expense receipts for 250) 1,500
Cash on hand (undeposited sales receipts) 4,200
Sinking fund cash 35,000
Cash in foreign bank (in equivalent pesos) 65,000
Customers' check on hand
Traveler's Check 14,000
Manager's Check 23,120
Short term treasury bills 52,000
What is the correct amount of cash?
A. P243,570
B. P220,450
C. P220,950
D. P243,820
PROBLEM 1-4
In the course of your audit of the London Corporation, its controller is attempting to determine the
amount of cash to be reported on its December 31, 2017 balance sheet.
The following information is provided:
a. Commercial savings account of P1,200,000 and a commercial checking account balance of

P1,800,000 are held at PS Bank.
b. Travel advances of P360,000 for executive travel for the first quarter of the next year (employee
to reimburse through salary deduction).
c. A separate cash fund in the amount of P3,000,000 is restricted for the retirement of a long term
debt.
d. Petty cash fund of P10,000.
e. An I.O.U. from a company officer in the amount of P40,000.
f. A bank overdraft of P250,000 has occurred at one of the banks the company uses to deposit its
time, the cash receipts. At the present company has no deposits at this bank.
g. The company has two certificates of deposit, each totalling P1,000,000. These certificates of
deposit have maturity of 120 days.
h. Las Conde has received a check dated January 2, 2013 in the amount of P150,000.
i. Las Conde has agreed to maintain a cash balance of P200,000 at all times at PSBank to
ensurefuture credit availability.
j. Currency and coin on hand amounted to P15,000.
Based on the above and the result of your audit, how much will be reported as cash and cash
equivalent at December 31, 2017?
a. P2,075,000
b. P3,025,000
c. P2,825,000
d. P5,025,000
PROBLEM 1-5
You noted the following composition of Template Company’s “cash account” as of December 31,
2017 in connection with your audit:
Demand deposit account P2,000,000
Time deposit – 30 days 1,000,000
NSF check of customer 40,000
Money market placement (due June 30, 2013) 1,500,000
Savings deposit in a closed bank 100,000
IOU from employee 20,000
Pension fund 3,000,000
Petty cash fund 10,000
Customer’s check dated January 1,2013 50,000
Customer’s check outstanding for 18 months 40,000
Total P7,760,000
Additional information follows:
a) Check of P200,000 in payment of accounts payable was recorded on December 31,2017 but
mailed to suppliers on January 5, 2013.
b) Check of P100,000 dated January 15, 2013 in payment of accounts payable was recorded and
mailed on December 31, 2017.
c) The company uses the calendar year. The cash receipts journal was held open until January 15,
2013, during which time P400,000 was collected and recorded on December 31, 2017.
The cash and cash equivalents to be shown on the December 31, 2017 balance sheet is
a. P3,310,000
b. 1,910,000’
c. P2,910,000
d. P4,410,000

Answer: A Cash in Bank - Tsunami Bank P432,710 Petty Cash Fund 10,250 Time Deposit 1,000,000

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PROBLEM 1-1

On deposit in current account with Real Bank P 900,000

Undeposited collections (in currency and coins) P40,200

The statement of financial position of

Checking account in Metrobank (outstanding checks as of year-end totaled 15,200) 105,200

a. Commercial savings account of P1,200,000 and a commercial checking account balance of

d. Petty cash fund of P10,000.

e. An I.O.U. from a company officer in the amount of P40,000.

j. Currency and coin on hand amounted to P15,000.

Demand deposit account P2,000,000

Time deposit – 30 days 1,000,000

NSF check of customer 40,000

Money market placement (due June 30, 2013) 1,500,000

Savings deposit in a closed bank 100,000

IOU from employee 20,000

Pension fund 3,000,000

Petty cash fund 10,000

Customer’s check dated January 1,2013 50,000

Customer’s check outstanding for 18 months 40,000

Additional information follows:

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