HOMEWORK ON CASH

PROBLEM 1

Simon Company has the following bank accounts:

Overdrawn checking account – PNB

Payroll account – Landbank (P70,000)
770,000
Value added tax account – Metrobank 250,000

In addition to the bank accounts, the following items are on hand:

Employee’s NSF check P50,000

Postage stamps 800
IOU from the president 40,000
Stale check issued 80,000
Customer’s check undeposited for lack of 40,000
countersignature
Gcash account 30,000
Petty cash fund (expense receipts of P9,000) 20,000

What is the cash balance to be reported on the statement of financial position?

PROBLEM 2

Paciano Company had the following balances at December 31, 2023:

Cash in checking account P500,000

Cash in money market account – 60 days 200,000
Treasury bill, purchased Dec. 1, 2023 maturing Feb 28, 2024 500,000
Treasury note, purchased Mar. 1, 2023 maturing Feb. 28, 2024 700,000

What amount should Paciano Company report as cash and cash equivalents in its December 31, 2023
statement of financial position?

PROBLEM 3

At December 31, 2023, Blanco Company had the following balances in the accounts it maintains at Manila
Bank:
Checking account # 101 P2,000,000
Checking account # 201 (200,000)
Time deposit account – 30 days 350,000
90-day treasury bill, due Mar. 1, 2024 400,000
Travel fund 125,000
Cash in sinking fund 500,000
180-day treasury bill due Apr. 1, 2024 875,000

Blanco Company classifies investments with original maturities of three months or less as cash
equivalents. In its December 31, 2023 statement of financial position, what amount should Blanco
Company report as cash and cash equivalents?

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PROBLEM 4

The following information pertains to Mapa Company on December 31, 2023:

Correct cash balance in general checking account with BDO bank P800,000
Overdraft in special checking account with Export bank (25,000)
Cash accumulated in special fund that will be used for plant expansion 3,200,000
Cash surrender value 75,000
Cash travel advances in the hands of company salespersons 30,000
Currency and coins in petty cash fund (including unreplenished vouchers of 20,000
P2,500)

What is the total amount that Mapa Company should report as “cash” in the current assets section of the
statement of financial position on December 31, 2023?

PROBLEM 5

The petty cash fund of Bracken Company on December 31, 2023 is composed of the following:
Currencies P4,800
Coins 2,200
Petty cash vouchers:
Stationery 2,500
Gasoline and oil 4,820
Taxi fare 500
Repairs of computer 580
Snacks to clients 1,200
A check drawn by Bracken Company to the order of J. Alonzo, petty cash
custodian representing her salary 7,000
A sheet of paper with the names of several employees together with a
contribution for a wedding gift. Attached to the sheet of paper is a currency of 1,400

The petty cash general ledger has an imprest balance of P25,000. What is the correct petty cash balance
on December 31, 2023? How much is the cash shortage or cash overage, if there is any?

PROBLEM 6

An account of the petty cash fund showed composition as follows:

Coins and currency P2,500

Paid vouchers
Transportation P900
Gasoline 600
Office Supplies 550
Postage Stamps 350
Due from employees 1,100 3,500
Employee’s check returned by bank marked “NSF” 1,500
Check drawn by company to the order of petty cash custodian 4,500

What is the correct amount of petty cash fund?

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Problem 7

On August 1, 2023, Samson Company established an imprest petty cash fund for P25,000 by writing a
check drawn against its general checking account. On August 23, the fund contained the following:

Currency and coins P 500

Receipts for office supplies 7,000
Vouchers for cash advances of various employees 9,000
Receipts for transportation and gasoline 8,500
Receipt for notary fee 1,000
Receipts for postage still unused 300

On August 24, the company wrote a check to replenish the fund. What is the amount of replenishment
under the imprest fund system? How much is the cash shortage or cash overage, if there is any?

PROBLEM 8

The statement of financial position of Plaridel Company as of December 31, 2023 showed a cash balance
and cash equivalents of P950,000. It was found to include the following items:

E-Money from customers P48,000

Current account 105,000
Note receivable in the possession of a collection agency 50,000
Customer’s postdated checks 30,000
Customer’s checks returned by bank marked “NSF” 50,000
Currencies and coins on hand 6,000
Petty cash fund 10,000
Cash in bank, net of bank overdraft of P30,000 in a checking account with another 350,000
bank

It was determined that check of P200,000 in payment of an equipment was drawn and recorded on
December 31, 2023 but delivered to the payee on January 5, 2024. The current account balance is being
maintained from a closed bank and suffered loss due to fire. What is the correct cash balance on December
31, 2023?

PROBLEM 9

Josephine Company’s checkbook balance on December 31, 2023 was P900,000. In addition, Josephine
Company held the following items in its safe on December 31:

Check payable to Josephine Co., dated January 5, 2024, not included in

December 31 checkbook balance P200,000
Check payable to Josephine Co., deposited December 20 and included in
December 31 checkbook balance but returned by bank on December 30,
stamped “NSF”. The check was redeposited January 2, 2024 and cleared on 50,000
January 3, 2024.
Check drawn on Josephine Co.’s account and payable to a vendor, dated and
recorded December 31 but not mailed until January 15, 2024. 150,000

What is the proper amount to be shown as cash on Josephine Co.’s statement of financial position on
December 31, 2023?

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PROBLEM 10

Dapitan Company had the following account balances at December 31, 2023:

Cash in bank P2,500,000

Cash on hand 10,000
Cash legally restricted for addition to plant and expected to be disbursed in 2024 1,500,000

Cash in bank includes P200,000 compensating balances against short-term borrowing arrangements. The
compensating balances are not legally restricted as to withdrawal by Dapitan Company.

In the current assets section of Dapitan Co.’s December 31, 2023 statement of financial position, how
should be reported as cash?

PROBLEM 11

The December 31, 2023, cash and cash equivalents of Calamba Co. includes the following items:

Cash on hand P 50,000

Petty cash fund 20,000
Security Bank account 1,250,000
PNB Current account No.1 1,450,000
PNB Current account No.2 (25,000)
BSP treasury bill – 60 days 3,500,000
BPI time deposit – 30 days 1,000,000

Other information:

a. The cash on hand includes a customer postdated check of P5,000, NSF customer check of P10,000
and GCash of P5,000.
b. The petty cash fund includes unreplenished petty cash vouchers for P3,000 and an employee check
for P5,000 dated January 5, 2024.
c. A check for P250,000 was drawn against Security Bank account dated January 5, 2024, delivered to
the payee and recorded December 31, 2023.
d. The BPI time deposit is set aside for acquisition of land to be used as factory site.

Compute the following:

1. Cash on hand
2. Petty cash fund
3. Security Bank current account
4. Cash and cash equivalents

PROBLEM 12

The following information has been extracted from the cash records of Bagumbayan Ltd and shows four
independent situations. Assume there were no direct bank debits or credits on the bank statement and
that all outstanding deposits and unpresented checks in one month appeared on the bank statement in the
following month.

a. The total of outstanding deposits on the 30 April bank reconciliation statement was P1,875. During
May, the company made deposits of P40,200 to its bank account but the bank statement showed that
only P39,840 was deposited during the month.

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b. The total of unpresented checks on the 30 April bank reconciliation statement was P1,440. During
May, the total of checks issued was P29,175 but the bank statement showed that only P27,720 in
checks were presented during the month.
c. During July, deposits recorded on the bank statement totaled P46,200, but deposits according to the
company’s records were P43,950 and outstanding deposits at 31 July were P4,125.
d. In July, cash payments according to Bagumbayan Ltd records were P40,800, checks presented and
shown on the bank statement were P43,000 and unpresented checks at 31 July were P3,960.

Required:

1. In situation a, what were the outstanding deposits at 31 May?

2. In situation b, what were the unpresented checks at 31 May?
3. In situation c, what were the outstanding deposits at 30 June?
4. In situation d, what were the unpresented checks at 30 June?

PROBLEM 13

Soledad Corporation keeps all its cash in a check account. An examination of the company’s accounting
records and bank statement for the month ended October 31, 2023 revealed the following information:

• The cash balance at October 31, 2023 represents:

Bank statement balance P846,900
Book balance P852,400

• A deposit of P95,000 placed in the bank’s night depository on October 30, 2023 does not appear on
the bank statement.

• The bank statement shows that on October 26, 2023, the bank collected a note for Soledad and
credited the proceeds of P93,500 to the company’s account. The proceeds included P3,500 interest,
all of which Soledad earned during the current accounting period. Soledad has not yet recorded the
collection.

• Checks outstanding on October 31, 2023:

No. 752 P15,000
No. 758 4,800
No. 767 7,200

• Soledad discovered that check number 759, written in October 2023 for P18,300 in payment of an
account had been recorded in the company’s records as P13,800.

• Included with the October 31, 2023 bank statement was an NSF check for P25,000 that Soledad had
received from Riverside Company on account on October 20. Soledad has not yet recorded the
returned check.

• The bank statement shows a P1,500 service charge for October.

Required:
Prepare a bank reconciliation statement using the adjusted balance method and prepare necessary
adjusting journal entries.

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Problem 14

Data concerning the records of Tara Company for the months of June and July 2023 follow:

June 30 July 31
Book balance P1,900,000 P?
Total cash receipts per book 1,400,000
Total cash disbursements per book 2,400,000
Bank balance 2,100,000 ?
Total charges in bank statement 2,500,000
Total credits in bank statement 1,200,000
NSF Check 60,000 40,000
Collections of accounts receivable not recorded by company 30,000 50,000
(corrected in subsequent month)
Overstatement of check in payment of salaries (corrected in 90,000 120,000
subsequent month)
Deposit in transit 130,000 260,000
Outstanding checks 270,000 30,000

Required: Prepare proof of cash.

January 2023

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