PROBLEM 1-1

Cash and Cash Equivalents

In connection with your annual audit of VICKAY Company's financial statements for the year ended
December 31, 2023, you have extracted the following information from your client's accounting records.

Cash on hand (Note 1) P1,200,000

Petty cash fund (Note 2) 10,000
Balanghay Bank current account (Note 3) 980,000
Solid Bank current account No. 1 460,000
Solid Bank current account No. 2 (100,000)
Lagaslas Bank savings account (Note 4) 1,500,000
Time Deposit (90 days) – BDO 2,000,000

Note 1 - Cash on hand included the following:

a. PHLPOST money orders from various customers, P300,000.
b. A customer check for P50,000 was returned by the bank on December 29, 2023 due to insufficient fund
but was subsequently redeposited and cleared by the bank on January 6, 2024
c. The Cash Receipts Journal was held open until January 10, 2024 during which time P300,000 was
collected and recorded on December 31, 2023.
d. A customer check for P30,000 dated January 30, 2024, received on December 27, 2023.
Note 2 - The Petty Cash Fund consisted of the following items on December 31, 2023.
a. Bills and coins P3,000
b. Unreplenished petty cash disbursements 1,000
c. Employees' IOUS 500
c. Currency in an envelope marked "employees' contributions for charity" 1,500
d. Check drawn by Vickay Company, payable to the petty cash custodian 4,000
10,000

Note 3 Included among the checks drawn by Vickay Company against the Balanghay Bank current account
are the following:
a. A check written and dated December 23, 2023 and delivered to payee on January 29, 2024, P30,000.
b. A check written on December 28, 2023, dated January 3, 2024, delivered to payee on December 29,
2023, P75,000.
Note 4- Vickay's savings account deposit in Lagaslas Bank has been earmarked for the acquisition of a
state-of-the-art manufacturing equipment within the next couple of months.
Based on the preceding information, compute for the adjusted balances of the following:
1. Cash on hand
A. P1,170,000
B. P823,000
C. P870,000
D. P820,000

2. Petty cash fund

A. P8,500
B. P7,000
C. P8,000
D. P10,000
3. Balanghay Bank current account
A. P1,085,000
C. P1,055,000
B. P1,010,000
D. P980,000

4. Cash and cash equivalents

A. P4,272,000
C. P4,273,500
B. P4,372,000
D. P4,322,000

PROBLEM 1-2
Cash and Cash Equivalents

Your audit of the December 31, 2023, financial statements of DIONISIO CORP. reveals the following:
Current account at Prime Bank P(30,000)
Current account at Prudent Bank 135,000
Treasury bills (acquired 3 months before maturity) 300,000
Treasury bills (maturity date is Dec. 31, 2024) 1,500,000
Payroll account 390,000
Foreign bank account – restricted (translated using
the December 31, 2023, exchange rate) 2,000,000
Postage stamps 1,250
Employee's postdated check 4,500
IOU from the vice-president 8,000
Credit memo from a supplier for a purchase return 8,100
Traveler's check 21,000
Money order 12,900
Petty cash fund (P3,000 in currency and expense receipts for P12,000) 15,000

What amount would be reported as cash and cash equivalents in the statement of financial position on
December 31, 2023?
A. P840,050
B. P873,900
C. P849,400
D. P861,900

PROBLEM 1-3
Cash and Cash Equivalents

The accountant of SANTIAGO COMPANY is in the process of preparing the company's financial statements
for the year ended December 31. 2023. He is trying to determine the correct balance of cash and cash
equivalents to be reported as a current asset in the statement of financial position. The following items
are being considered:
• Balances in the company's accounts at the Metropolitan Bank:
➤Current account P81,000
➤Savings account P132,600

• Undeposited customer checks of P22,200 (including a customer check dated January 2, 2024, for
P3,000).
• Currency and coins on hand of P3,480.
• Savings account at the Northern Philippines Bank with a balance of P2,400,000. This account is being
used to accumulate cash for future plant expansion (in 2024).
• Petty cash of P4,000 (currency of P1,200 and unreplenished vouchers for P2,800).
• P120,000 in a current account at the Northern Philippines Bank This represents a 20% compensating
balance for P600,000 loan with the bank. Santiago Company is legally restricted to withdraw the funds
until the loan is due in 2026.
• Treasury bills:
Two-month maturity bills P 90,000
Seven-month bills 120,000

• Time deposit (placement term is 2 months) P100,000

• Commercial papers (maturities range

from 30-90 days at the time of purchase) P500,000

• Postal money orders received from customers P200,000

What total amount of cash and cash equivalents should be reported under current assets?
A. P1,047,480
C. P1,127,480
B. P627,480
D. P1,027,480

PROBLEM 1-4
Cash and Cash Equivalents

The following information has been extracted from the accounting records of the URSULA COMPANY at
December 31, 2023:

a. Cash on hand (see note below) P230,000

b. Impukan Bank savings account 9,500
c. 364-day Treasury bills purchased March 1, 2023 400,000
d. Petty cash fund (see note below) 20,000
e. Tipid Bank current account (see note below) 160,000
f. Time deposit placements:

Date Term
Dec. 15, 2023 30 days 30,000
Oct. 31, 2023 90 40,000
Nov. 30, 2023 180 days 25,000

g. Employee travel advances 7,000

h. Cash in bond sinking fund 500,000
i. Customer's note receivable 45,000
J. Postage stamps 2,400
k. Commercial papers issued to retire short-term
obligations to mature in 2024 800,000

The following are included in cash on hand:

• A customer check for P43,000 returned by the bank on December 28, 2023 due to insufficient fund. It
was redeposited and cleared the bank on January 2, 2024.

• A customer check for P75,000 dated January 3, 2024, received December 27, 2023.

• PHLPost money orders received from customers, P30,000.

The petty cash fund consists of the following:

Currency and coins P13,500
IOUS from officers and employees 3,000
Unreplenished petty cash disbursements 1,500
Currency in envelope marked donations for calamity victims 1,500
P20,000

The following information pertains to Tipid Bank current account:

• A check for P13,000 was dated and recorded on December 29, 2023, but was delivered to payee on
January 5, 2024.

• A check for P5,000 dated January 10, 2024, payable to a supplier was recorded and released to payee
on December 19, 2023.

What total amount should be recorded as cash and cash equivalents on December 31, 2023?
A P1.191,000
C. P378,000
B. P1,181,500
D. P391,000

PROBLEM 1-5
Cash and Cash Equivalents

The controller of the LYRIC CO. is trying to determine the amount of cash and cash equivalents to be
reported on its December 31, 2023, statement of financial position.. The following Information is
provided:
1. Balances in the company's accounts at the Monte Bank:
• Checking account-P540,000
• Savings account-P884,000
2. Undeposited customer checks of P208,000.
3. Currency and coins on hand of P23,200.
4. Savings account at the Naic Bank with a balance of P350,000. This account is being used to accumulate
cash for future plant expansion (in 2025).
5. P800,000 balance in a checking account at the Naic Bank.
6. Treasury bills: 30-day maturity bills totaling P600,000, and 180-day bills totaling P800,000.

On December 31, 2023, what amount should be reported as cash and cash equivalents?
A. P3,055,200
B. P2,455,200
C. P2,955,200
D. P2,355,200

PROBLEM 1-6
Cash and Cash Equivalents

The following facts apply to OTO COMPANY during 2023:

1. Savings account of P900,000 and a checking account balance of P1,200,000 are held at Manila Bank.
2. Money market placement with maturity of 3 months, P7,500,000.
3. Currency and coins on hand amounted to P11,550.
4. Travel advances of P270,000 for the first quarter of next year
(employee reimbursement will be through salary deduction). 5. Oto Company has purchased P3,150,000
of commercial paper of Mendez Corp. which is due in 60 days.
6. A separate cash fund amounting to P2,250,000 is restricted for the retirement of long-term debt.
7. Petty cash fund of P1,500.
8. An IOU from an employee of Oto Company in the amount of P2,000.
9. Two certificates of deposit, each totaling P500,000. These CDs have a maturity of 120 days.
10. Oto Company has received a check from a customer in the amount of P187,500 dated January 15,
2024.
11. On January 1, 2023, Oto Company purchased marketable equity securities to be held as "trading" for
P3,000,000. On December 31, 2023, its market value is P4,300,000.

What amount should be reported as cash and cash equivalents on December 31, 2023?
A. P13,763,050
B. P12,575,550
C. P12,751,500
D. P12,763,050

PROBLEM 1-7
Computation of Correct Cash Balance

The Cash account of the BEA CORPORATION as of December 31, 2023, was composed of the following:

On deposit in current account with the Bank of PI P900,000

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 company
dated January 15, 2024 70,000
A check drawn by a supplier dated December 28, 2023,
for goods returned by the company 60,000
A check dated May 31, 2023, drawn by the company
against the Bank of Manila 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 Bank of Manila 410,000
Petty cash fund of which P10,000 is in currency; P7,200
in form of employees' IOUS; and P2,800 is supported
by approved petty cash vouchers for expenses all dated
prior to closing of the books on December 31, 2023 20,000
Total P1,960,000
Less: Overdraft with the Bank of Manila secured by
a chattel mortgage on the inventories Cash balance per ledger 300.000
P1.660.000

What is the amount of cash to be reported on the December 31, 2023, statement of financial position of
Bea Company?

PROBLEM 1-8
Cash and Cash Equivalents

In connection with your audit of the financial statements of ONOR COMPANY for the year ended
December 31, 2023, you gathered the following information.
1. The company maintains its current account with TLC Bank. The bank statement on December 31, 2023,
showed a balance of P638,340.

Your audit of the company's account with TLC Bank disclosed the following:

• A check for P22,500 received from a customer whose accountis current had been deposited and then
returned by the bank on December 28, 2023. No entry was made for the return of this check. The customer
replaced the check on January 15, 2024.

•A check for P5,720 was cleared by the bank as P7,520, The bank made the correction on January 2, 2024.

• A check for P3,500 representing payment of an employee advance was received and deposited on
December 27, 2023, but was not recorded until January 3, 2024.

• Postdated checks totaling P67,300 were included in the deposits in transit. These represent collections
of current accounts receivable from customers. The checks were actually deposited on January 5, 2024.

• Various debit memos for drafts purchased for payment of importation of equipment totaling P230,000
were not yet recorded. These purchases were previously set up as accounts payable. Said equipment
arrived in December 2023.

• Interest earned on the bank balance for the 4th quarter of 2023, amounting to P1,950 was not recorded.
Bank service charges totaling P1,260 were not recorded.

•Deposit in transit and outstanding checks at December 31, 2023, totaled P136,250 and P276,380,
respectively.
2. Various expenses from the company's Imprest petty cash fund dated December 2023, totaled P16,250,
while those dated January 2024, amounted to P5.903. Another disbursement from the fund dated
December 2023 was a cash advance to an employee amounting to P3,500. A replenishment of the petty
cash fund was made on January 8, 2024.

3. The company's trial balance on December 31, 2023, includes the following accounts:
Cash in bank- TLC Bank P 748,320
Cash in bank-ER Bank (restricted
account for plant expansion, expected to be disbursed in 2024) 700,000
Petty cash fund 30,000
Time deposit, placed December 20, 2023, and due March 20, 2024 1,000,000
Money market placement - Prudential Bank 4,000,000

1. What is the adjusted petty cash fund balance on December 31, 2023?
A. P4,347
C. P30,000
B. P10,250
D. P24,097

2. What is the adjusted Cash in bank-TLC Bank balance on December 31, 20237
A. P500,010
C. P432,710
B. P748,320
D. P429,110

3. The entry to adjust the Cash in bank - TLC Bank account should include a debit to
A. Accounts receivable for P89,800.
B. Accounts receivable for P86,300.
C. Accounts payable for P228,200.
D. Interest expense for P1,950.

4. The December 31, 2023, statement of financial position should show "Cash and cash equivalents" at
A. P6,142,960
B. P5,439,360
C. P4,442,960
D. P5,442,960

PROBLEM 1-9
Cash in Bank and Petty Cash Fund

BARTOLOME COMPANY was incorporated 3 years ago as a trading company engaged in the sale and
distribution of hardware and electrical supplies.
The company maintains its bank account with Secured Bank. Your review of the bank reconciliation
statement disclosed the following Information:
1. On December 22, 2023, the bank erroneously credited the account of Bartolome Company for P195,000
representing deposit for the account of another company.
2. Postdated checks totaling P37,900 were included in the deposits in transit. These represent collections
of accounts receivable from customers. The checks were actually deposited on January 5, 2024.

3. On December 28, 2023, the company issued checks to creditors totaling P115,000. These checks were
released on January 5, 2024.

4. A check dated December 12, 2023, in payment of accounts payable was recorded as P12,000. Upon
examination of the checks returned by the bank, the actual amount was P21,000.

5. A check for P4,750 in payment of a minor repair of office equipment was not recorded on the company
books.

6. Transfer of fund of P59,300 to Secured Bank current account of DBS Securities was not recorded. This
pertains to purchase of 5,000 shares of William Lines to be held as trading securities. Based on quoted
price as of December 31, 2023, the market value per share is p8.20.

7. Interest earned amounting to P5,720 was not recorded.

8. Deposits in transit and outstanding checks at December 31, 2023, amounted to P89,200 and P132,000,
respectively.

9. The cash in bank balance per book on December 31, 2023, is P681,200.

10. Your review of the accounts receivable schedule disclosed that various collections totaling P17,350
were not recorded in the books but already reflected in the subsidiary ledgers.

The Petty cash fund of P35,000 maintained on an imprest basis was counted on January 2, 2024.
Unreplenished expenses include petty cash vouchers for various expenses totaling P19,300 and
employees' advances for P5,800 all dated December 2023.

1. The cash balance per bank statement on December 31, 2023, is

A P946,120
B. P988,770
C. P984,020
D. P993,020

2. The adjusted Cash in banke balance at December 31, 2023, is

A. P708,320
B. P746,220
C. P726,320
D. P702,600

3. The adjusted Petty cash fund balance at December 31, 2023, is

A. P15,700
B. P29,200
C. P35,000
D. P9,900
PROBLEM 1-10
Petty Cash Fund

You are assigned to the petty cash count for the Jervick Trading at December 31, 2023. The contents of
the fund are listed below. The custodian of the fund is Annie Bartolome, (Office Secretary). The balance
of the petty cash fund per the company's general ledger is P30,000. Such fund is being maintained on an
imprest basis.
Bills
Five hundred-peso bills; 13
One hundred-peso bills; 20
Fifty-peso bills; 44
Twenty-peso bills; 30

Coins
One-peso coins; 12 rolls of 20 and 10 loose

An IOU signed by the company treasurer for P3,750.

Postage stamps of various denominations - P750. (The voucher is also for P750.)

A receipted bill from NCR Bulletin newspaper for advertising - P420,

A receipted bill from NB Store for copy paper - P660.

A receipted bill from Refill Gas Stations for gas and oil for the company's delivery truck - P6,540.

A check signed by Melvin Cruz, an employee, dated December 28, 2023-P1,050.

A check signed by Celine Dilon, sales manager, dated January 20, 2024 - P990.

A notation on a sheet of paper as follows: Proceeds of employees contributions for office party - P3,630.

A receipted bill from Bona Restaurant for refreshment served at employees' party, December 24, 2023 -
P2,010.

What amount should be reported as cash shortage or cash overage?

PROBLEM 1-11
Petty Cash Fund

The auditor for SAMANTHA, INC. examined the petty cash fund immediately after the close of business,
July 31, 2023, the end of the company's natural business year. The petty cash custodian presented. the
following during the count:

Currency P1,650
Petty cash vouchers:
Postage 420
Office supplies expense 900
Transportation expense 340
Computer repairs 800
Advances to office staff 1,500
A check drawn by Samantha, Inc., payable to the
Petty cash custodian 7,200
Postage stamps 300
An employee's check, returned by bank, marked NSF 1,000
An envelope containing currency of P1,890 for a gift for
A retiring employee 1,890
P16,000

The general ledger shows an imprest petty cash fund balance of P16,000.

1. How much is the petty cash shortage or overage?

A. P2,190 overage
B. P2,190 shortage
C. P1,890 shortage
D. P1,890 overage

2. What is the adjusted balance of the petty cash fund at July 31, 2023?
A. P10,740.
B. P3,540
C. P7,200
D. P8,850

PROBLEM 1-12
Petty Cash Fund

On January 1, TANYA CO. establishes a petty cash account and designates Orly Reyes as petty cash
custodian. The original amount included in the petty cash fund is P10,000. The following disbursements
are made from the fund:

Office supplies P3,460

Postage 2,240
Entertainment 840

The balance in the petty cash box is P3,200.

1. The person responsible, at all times, for the amount of the petty cash fund is the
A. Chairman of the Board of Directors
B. President of the company
C. Petty cash custodian
D. General cashier

2. The following are appropriate procedures for controlling the petty cash fund, except
A. To monitor variations in different types of expenditures, the petty cash custodian files petty cash
vouchers by category of expenditure after replenishing the fund.
B. To replenish the fund, the general cashier issues a company check to the petty cash custodian, rather
than cash.
C. To determine that the fund is being accounted for satisfactorily, surprise counts of the fund are made
from time to time by the internal auditor or other responsible official.
D. Each individual to whom petty cash is paid is required to present signed receipts to the petty cash
custodian.

3. The entry to replenish the fund is

A. Office supplies expense 3,460
Postage expense 2,240
Entertainment expense 840
Cash 6,540
B. Office supplies expense 3,460
Postage expense 2,240
Entertainment expense 840
Cash over and short 260
Petty cash 6,800

C. Office supplies expense 3,460

Postage expense 2,240
Entertainment expense 840
Cash over and short 260
Cash 6,800

D. Office supplies expense 3,460

Postage expense 2,240
Entertainment expense 840
Petty cash 6,800

4. The objective of establishing a petty cash fund is to

A. Cash checks for employees
B. Account for all cash receipts and disbursements
C. Account for cash sales
D. Facilitate payment of small, miscellaneous items

5. What is the effect of not replenishing the petty cash at year-end and not making the appropriate
adjusting entry?
A. A detailed audit is essential
B. The petty cash custodian should turn over the petty cash to the general cashier
C. Cash will be overstated and expenses understated
D. Expenses will be overstated and cash will be understated

PROBLEM 1-13
Count of Petty Cash Fund and Undeposited Collections
In connection with your audit of the financial statements of BENJAMIN CORP. for the year ended
December 31, 2023, you conducted a surprise count of the company's petty cash fund and undeposited
collections at 8:20 a.m. on January 3, 2024. Your count disclosed the following:
Bills and coins
Bills Coins
P100.00 5 pieces 5.00 18 pieces
50.00 40 pieces 1.00 214 pieces
20.00 48 pieces

Postage stamps (unused) – P365

Checks
Date Payee Maker Amount
Dec. 30 Cash Custodian P 1,200
Dec. 30 Benjamin Corp. SLV, Inc. 14,000
Dec. 31 Benjamin Corp. Mario Lansang,
Sales manager 1,680
Dec. 31 Benjamin Corp. MSU Corp. 17,800
Dec. 31 Benjamin Corp. Ateneo, Inc. 8,300
Dec. 31 Taiwan Corp. Benjamin Corp. 27,000

Unreimbursed vouchers

Date Payee Maker Amount

Dec. 23 Mario Lansang, Advance trip to P20,0000
Sales manager Tagaytay City
28 Central Post Office Postage stamps 1,620
29 Messengers Transportation 150
29 Byte, Inc. Computer repair 800

Other items found inside the cash box:

1. Unclaimed pay envelope of Juan MacDonut. Indicated on the pay slip is his net salary of P7,500. Your
inquiry revealed that Juan's salary is mingled with the petty cash fund.
2. The sales manager's liquidation report for his Tagaytay City trip.
Cash advance received on Dec. 23 P20,000
Less: Hotel accommodation, meals, etc. P16,000
Bus fare for two 1,200
Cash given to Pablo, salesman 1,000 18,000
Balance P1,800

Accounted for as follows:

Cash returned by Pablo to the sales manager P 120
Personal check of the sales manager 1,680
Total P1,800

Additional information:
1. The custodian is not authorized to cash checks.
2. The last official receipt included in the deposit on December 30 is No. 4351 and the last official receipt
issued for the current year is No. 4355. The following official receipts are all dated December 31, 2022

OR No. Amount Form of payment

4352 P13,600 Cash
4353 17,800 Check
4354 3,600 Cash
4355 8,300 Check

3. The petty cash balance per general ledger is P25,000. The last replenishment of the fund was made on
December 22, 2023.

1. What is the amount of shortage due from the sales manager?

A. P240
B. P1,800
C. P120
D. P 0

2. What is the amount of undeposited collections on December 31, 2023?

A. P44,300
B. P84, 300
C. P57,300
D. P41,000

3. The adjusting entries on December 31, 2023, should include a net debit to Travel expenses of
A. P17,320
B. P18,320
C. P18,200
D. P18,080

4. The cash count should include total checks of

A. P69,980
B. P42,980
C. P41,780
D. P41,300

5. What is the total cash shortage?

A. P22,166
B. P8,166
C. P22,406
D. P20,486
PROBLEM 1-14
Petty Cash Fund; Bank Reconciliation

Anying Velasco is reviewing the cash accounting for ABX, Inc. Anying's review will focus on the petty cash
fund account and the bank reconciliation for the month ended May 31, 2023. She has collected the
following information from ABX's bookkeeper for this task

Petty Cash Fund

1. The petty cash fund was established on May 2, 2023, in the amount of P10,000.
2. Expenditures from the fund by the custodian as of May 31, 2023, were evidenced by approved petty
cash vouchers for the following:
Various office supplies P3,920
IOU from employees 1,200
Shipping charges 2,298
Miscellaneous expense 1,526

On May 31, 2023, the petty cash fund was replenished and increased to P12,000; currency and coins in
the fund at that time totaled P756.

Bank Reconciliation
Shore Bank
Bank Statement
Disbursements Receipts Balance
Balance, May 1, 2023 P350,760
Deposits P1,120,000
Note payment from customer
(interest of P1,200) 37,200
Checks cleared during May P1,246,000
Bank service charges 1,080
Balance, May 31, 2023 260,880

ABX, Inc.’s Cash Account

Balance, May 1, 2023 P354,000

Deposits during May 2023 P1,240,000
Checks written during May 2023 P1,273,000

Deposits in transit are determined to be P120,000, and checks outstanding at May 31 total P34,000 Cash
on hand (besides petty cash) at May 31, 2023, is P9,840.

1. What is the amount of petty cash shortage?

A. P2,300
B. P11,244
C. P300
D. P0

2. The journal entry to record the replenishment of, and increase in the petty cash fund includes a credit
to
A. Cash of P10,944
B. Cash of P11,244
C. Petty cash fund of P10,944
D. Petty cash fund of P11,244

3. What amount of cash should be reported in the May 31, 2023, statement of financial position?
A. P368,720
B. P356,720
C. P368,420
D. P358,880

PROBLEM 1-15
Bank Reconciliation; Computation of Cash Balance

Presented below are a series of unrelated situations. Answer the question at the end of each situation.

1. The accountant of NARCISA CO. provided the following data in reconciling the April 30 cash in bank
balance:

Balance per bank, April 30 P130,350

Balance per books, April 30 85,000
Bank service charge 2,000
Deposits in transit 49,000
Outstanding checks 17,650
Note collected by bank including P11,200
Interest (Narcisa Co. not yet informed) 136,000
Check drawn by XYZ Co. erroneously charged
by bank to Narcisa’s account 54,600

A transposition error was made in recording a sale and deposit in the sales journal and cash receipts
journal in April.
Correct amount P13,658
Recorded as P16,358

What is the adjusted cash balance on April 30?

2. The following information is included in EMIL CORPORATION'S bank statement for the month of March:

A customer's check has been marked "NSF"

by the bank and returned P13,000
Bank service charge for March 1,200

In comparing the bank statement to the company's cash records, you found:
Outstanding checks on March 31 P184,000
Deposits made but are not yet shown in the
April bank statement 14,000
The deposits in transit and outstanding checks have been correctly taken up in the company's books. You
also found a customer's check for P17,400 that had not yet been deposited and had not been recorded in
Emil's books. Your client's books show a cash balance of P36,420.

What is Emil Corporation's correct cash balance at March 31?

3. The following information pertains to a checking account of a company at June 30, 2023.

Balance per bank statement P200,000

Interest earned for the second quarter 500
Outstanding checks 15,000
Customers’ checks returned for insufficient funds 5,000
Deposit in transit 25,000

What is the cash balance per books at June 30, 2023?

4. A company is reconciling its bank statement with internal records. The cash balance per the company's
books is P45,000. There are P5,000 of bank charges not yet recorded, P7,500 of outstanding checks,
P12,500 of deposits in transit, and P15,000 of bank credits and collections not yet taken up in the
company's books.

What is the cash balance per bank?

5. A company shows a cash balance of P175,000 on its bank statement dated June 30. As of June 30, there
are P55,000 of outstanding checks and P37,500 of deposits in transit.

What is the adjusted cash balance on June 30?

6. The Cash account shows a balance of P225,000 before reconciliation. The bank statement does not
include a deposit of P11,500 made on the last day of the month. The bank statement shows a collection
by the bank of P4,700 and a customer's check for P1,600 was returned because it was NSF. A customer's
check for P2,250 was recorded on the books as P2,700, and a check written for P395 was recorded as
P485.

What should be the correct cash balance?

7. On July 5, 2022, EMILIA CORP. received its bank statement for the month ending June 30. The statement
showed a P209,500 balance while the cash account balance on June 30 was P35,000. In reconciling the
balances, the auditor discovered that:
1. The June 30 collections of P176,000 were recorded on the books but were not deposited until July.
2. The bank service charges for the month of June totaled P3,000.
3. A paid check for P24,300 was entered incorrectly in the cash payments journal as P34,200.

What is the total outstanding checks at June 30, 2023?

PROBLEM 1-16
Bank Reconciliation

The bank statement for the current account of IAN Co. showed a December 31, 2023, balance of P585,284.
Information that might be useful in preparing a bank reconciliation is as follows:
a) Outstanding checks were P52,810.
b) The December 31, 2023, cash receipts of P23,000 were not deposited in the bank until January 2, 2024.
c) One check written in payment of rent P8,940 was correctly recorded by the bank but was recorded by
lan Co. as a P9,840 disbursement.
d) In accordance with prior authorization, the bank withdrew P18,000 directly from the current account
as payment on a mortgage note payable. The interest portion of that payment was P14,000. Ian Co. has
made no entry to record the automatic payment.
e) Bank service charges of P740 were listed on the bank statement.
f) A deposit of P35,000 was recorded by the bank on December 12, but it did not belong to lan Co.
g) The bank statement included a charge of P3,400 for a not- sufficient-fund check. The company will seek
payment from the customer.
h) lan Co. maintains an P8,000 petty cash fund that was appropriately reimbursed at the end of December.
i) According to instructions from lan Co. on December 30, the bank withdrew P40,000 from the account
and purchased treasury bills for lan Co. The company recorded the transaction in its books on December
31 when it received notice from the bank. Half of the treasury bills mature in three months and the other
half in six months.

1. What is the cash in bank balance per books on December 31, 20237
A PS49,714
B. P543.514
C. P534,914
D. P541,714

2. What is the adjusted cash in bank balance on December 31, 2023?

A. P520,474
B. P527,274
C. P518,674
D. P520,154

3. What amount of cash and cash equivalents should be shown under current assets on December 31,
2023?
A. P928,474
B. P728,474
C. P720,474
D. P735,274
PROBLEM 1-17
Bank Reconciliation:

Unadjusted to Adjusted Balances Format

The following data were taken from GARAY's check register for the month of April. Garay's bank
reconciliation for March showed one outstanding check, check No. 178 for P2.150 (written on March 20),
and one deposit in transit for P4 350 (made on March 31).

Date Item Checks Deposits Balance

2023
April 1 Beginning balance 6,150
1 Deposit 26,127 32,317
1 Check No. 179 250 32,567
4 Check No. 180 10,673 21,898
27 Deposit 11,774 33,672
29 Check No. 181 13,217 20,490

The following is from Garay's bank statement for April.

Date Item Checks Deposit Balance

2023
April 1 Beginning Balance 3,950
3 Check No. 179 250 3,700
3 Deposit 4,350 8,050
5 Check No. 180 10,673 (2,623)
5 Automatic loan 8,150 5,527
5 Deposit 26,417 31,944
20 NSF check 1,000 30,944
20 Service charge 600 30,344
30 Interest 82 30,426

Assume that any errors or discrepancies you find are Garay's, not the bank's

What is the adjusted cash balance as of April 30?

A P26,833
B. P26,838
C. P30,426
D. P26,872
PROBLEM 1-18
Bank Reconciliation:
Unadjusted to Adjusted Balances Format

The following information pertains to FLINT CORP Flint Corp.

Flint Corp.
BANK RECONCILIATION
November 30, 2023

Balance per bank statement P435,000

Less: Outstanding checks
Less: Outstanding checks
No. 4321 P 6,000
4329 15,000
4340 1,700
4341 4,675 27,375
P407,625
Add: Deposit in transit 16,200
Balance per books P423,825

CHECK REGISTER
December 2023

Vouchers
Date Payee No. Payable Discount Cash
Dec 1 San Beda, Inc. 4342 P 10,000 P500 P9,500
3 Miriam Corp. 4343 4,200 - 4,200
7 UE Enterprises 4344 3,755 - 3,755
12 PSBA Corp. 4345 12,000 120 11,880
15 Payroll 4346 96,000 - 96,000
16 BU, Inc. 4347 6,300 - 6,300
18 New Era Co. 4348 14,200 142 14,058
21 UST, Inc. 4349 7,000 - 7,000
22 Petty cash fund 4350 10,000 - 10,000
28 Payroll 4351 98,000 - 98,000
P261,455 P762 P260,693
 BANK STATEMENT
BANKABLE BANK Page 1 of 1
PERIOD: NOVEMBER 30, 2023 - DECEMBER 31, 2023
No.: 001-43-44
Check
Date Description number Debit Credit Balance
Balance last statement P435,000
Dec. 1 Cash deposit P16,200 451,200
1 Check issued 4329 P15,000 436,200
4 Check issued 4342 9,500 426,700
4 Check issued 4341 4,675 422,025
5 Check deposit 49,000 471,025
6 Check issued 4343 4,200 466,825
8 Check deposit 14,000 480,825
10 Check issued 4344 3,755 477,070
15 Encashment 4346 96,000 381,070
22 Encashment 4350 10,000 371,070
28 Encashment 4351 98,000 273,070
29 Debit memo-
Service charge 1,000 272,070
29 Credit demo-
Interest 1,550 273,620

Deposits in transit at December 31 totaled P49,000.

1. What is the total book receipts for December?

A. P113,550
B. P80,750
C. P63,000
D. P112,000

2. What is the cash balance per books on December 31, 2023?

A. P275,132
B. P226,132
C. P291,332
D. P274,370

3. What is the total outstanding checks on December 31, 2023

A. P68,313
B. P39,238
C. P46,938
D. P40,938

4. What is the adjusted cash balance on November 30, 2023?

A. P446,375
B. P417,825
C. P423,825
D. P435,000
5. What is the adjusted cash balance on December 31, 2023?
A. P281,682
B. P275,682
C. P226,682
D. P274,920

PROBLEM 1-19
Bank Reconciliation:
Unadjusted to Adjusted Balances Format

EDGARDO CO. was organized on January 2, 2023. The following items are from the company's trial balance
on December 31, 2023.

Ordinary share capital P1,500,000

Share premium 150,000
Merchandise inventory 69,000
Land 1,000,000
Building 1,400,000
Furniture and fixtures 367,000
Accounts receivable 165,400
Accounts payable 389,650
Notes payable-bank 500,000
Sales 6,235,200
Operating expenses (including deprecation of
P400,000) 1,005,150

Additional information is as follows:

1. Deposits in transit, December 31 P384,660
2. Service charge for December 2,000
3. Outstanding checks, December 31 475,000
4. Bank balance, December 31 892,000
5. Edgardo Co.'s mark up on sales is 30%.

1. What is the total collections from sales?

A. P6,114,967
B. P4,119,240
C. P6,235,200
D. P6,069,800

2. What is the total payments for merchandise purchases?

A. P3,905,990
B. P4,649,140
C. P4,043,990
D. P5,914,550

3. What is the total cash receipts per books?

A. P7,819,800
B. P8,169,800
C. P8,219,800
D. P8,069,800

4. What is the total cash disbursements per books?

A. P7,816,140
B. P7,416,140
C. P8,021,290
D. P7,278,140

5. What is the cash balance per books on December 31?

A. P653,660
C. P1,203,660
B. P803,660
D. P707,060

6. What is the adjusted cash balance on December 31?

A. P801,660
B. P651,660
C. P1,201,660
D. P803,660

PROBLEM 1-20
Computation of Cash Receipts and Disbursements

In connection with your audit of the cash account of ANNIE CORP., you gathered the following
information.

a. Balance per bank, December 1, 2023 P145,000

b. Total bank receipts (credits) in December 346,000
c. Balance per bank, December 31, 2023 114,500
d. Outstanding checks, Nov. 30, 2023
(including P12,000 paid by bank in December) 67,000
e. Outstanding checks, December 31, 2023
(including checks issued in November) 94,162
f. Deposit in transit, November 30, 2023 39,458
g. A customer's check received on December 4, 2023,
was returned by bank on December 7 marked
"NSF." It was redeposited on December 8, 2023.
The only entry made was to take up the collection
on December 4, 2023. 11,143

1. What is the total book receipts in December?

A. P295.399
B. P306.542
C. P334857
D. P346,000

2. What is the total bank disbursements in December?

A. P315,500
B. 2376,500
C. P231,500
D. P201,000

3. What is the total book disbursements in December?

A. P447,519
B. P331,519
C. P403,662
D. P392, 519