CASH AND

RECEIVABLES

FINANCIAL ASSETS
 PROBLEM 1

Petty cash fund P 4,000

Checking account, per bank,
(net of outstanding check) 230,000
Undeposited Receipts 115,000
Currencies and coins 55,000
Correct Cash Balance P 404,000
 PROBLEM 2

Coins and Currency P 50,000

Checks from customers 600,000
Petty cash funds 4,000
Checking account – A 2,100,000
Money order 15,000
Saving account 100,000
Bank Draft 40,000
Total P2,909,000
 PROBLEM 3

Checking account P 48,000

Savings account 30,000
Money Market (30-day) 40,000
Payroll account 20,000
Certificate of time deposit, due Feb. 15, 2022 75,000
Petty cash fund 1,500
Total cash and cash equivalents P 214,500
 PROBLEM 4
The company's policy is to treat all highly-liquid investments
with a maturity of three months or less when purchased as
cash equivalents. The following items are therefore treated as
cash and cash equivalents at December 31:

Cash in checking account $ 35,000

Cash in money market account 75,000
U.S. Treasury bill, purchased 12-1-18
maturing 2-28-19 200,000
Total $310,000

The $150,000 Treasury bill matures in five months after

its purchase and does not qualify.
 PROBLEM 5

Balance per checkbook P160,000

Undelivered check 25,000
NSF check (3,500)
Correct Cash Balance P181,500
 PROBLEM 6
Balance per ledger 750,000
Service charges (10,000)
Collection of note 300,000
Book error (90,000 – 60,000) 30,000
Unrecorded check for traveling expenses (100,000)
Adjusted book balance 970,000

Balance per bank 1,240,000

Deposit in transit 280,000
Total 1,520,000
Adjusted bank balance (970,000)
Outstanding checks 550,000
 PROBLEM 7

Bank disbursements for July 9,000,000

Outstanding checks – June 30 (1,400,000)
Outstanding checks – July 31 1,000,000
Book disbursement for July 8,600,000
 PROBLEM 8

Checking account #101 $175,000

Checking account #201 (10,000)
Money market account 25,000
90-day CD, due 2/28/20 50,000
180-day CD, due 3/15/20 − - -
Total $240,000
 PROBLEM 9

Reported Balance 5,000

No Sufficient fund (500)
Unreleased Check 300

Total $4,800
 PROBLEM 10

Government treasury bills 2,000,000

Cash 3,400,000
Commercial papers 1,500,000
Total cash 6,900,000
 PROBLEM 11

Currencies 20,000
Coins 2,000
Check drawn to the order of the
petty cash custodian 15,000

ANSWER 37,000

The check drawn payable to the order of the

petty cash custodian representing her salary is
actually an accommodation check. Thus, it is include
as part of cash.
 PROBLEM 12

(a)
Cash balance per bank $ 7,000
Add: (1) Deposit in transit 4,200
11,200
Less: (4) Outstanding checks 5,800
Adjusted cash balance per books $ 5,400

Cash balance per books $ 4,667

Add:(5) Accounts Payable Error $ 63
(7) Collection 1,260 1,323
5,990
Less: (2) Check printing 40
(6) NSF Check 550 590
Adjusted cash balance per books $ 5,400
 PROBLEM 13

Beginning: A/R 1/1/19 $ 100,000

Additions: Credit sales 611,000
Recoveries 17,000
Subtractions: Collections (591,000)
Collections (Recovery) (17,000)
Written-off A/R (45,000)

Ending: A/R 12/31/19 $ 75,000

 PROBLEM 14

Beg. balance, 1/1/18 $ 650,000

Add: credit sales 2,700,000
Subtotal 3,350,000
Less: collections (2,150,000)
write-offs (40,000)
sales returns (75,000)
Ending balance, 12/31/18 $ 1,085,000
 PROBLEM 15

Trade accounts receivable $ 93,000

Allowance for uncollectible accounts (2,000)
Claim against shipper for goods
lost in transit 3,000

Net Current Receivable $ 94,000

 PROBLEM 16
Accounts receivable-January 1 650,000
Credit sales 2,700,000
Total 3,350,000
Less: collections from customers 2,150,000
accounts written off 40,000
sales returns 75,000
Accounts receivable- Dec. 31 1,085,000

The net realizable value of accounts receivable is computed as

follows:
Accounts receivable 1,085,000
Less: allowance for doubtful accounts 110,000
Allowance for sales returns 50,000
Net realizable value 925,000
 PROBLEM 17

Accounts receivable-customers
(7,800,000+400,000) 8,200,000
Allowance for doubtful accounts (200,000)
Accounts receivable- officers 500,000
Debit balances- creditors 300,000

Total Receivables 8,800,000

PROBLEM 18

Accounts receivable -unassigned 2,000,000

Accounts receivable -assigned 1,500,000
Trade installment receivable (850,000-50,000) 800,000
Accounts receivable from officers 150,000
Accounts on which postdated checks are held 200,000

Total trade accounts receivable 4,650,000

 PROBLEM 19
(a)
Aug.10Allowance for Doubtful Accounts 1,200
Accounts Receivable—Kim Joyce 1,200

Sept.12 Allowance for Doubtful Accounts 4,000

Accounts Receivable—Joe Watt 4,000

Oct. 10 Accounts Receivable—Kim Joyce 1,200

Allowance for Doubtful Accounts 1,200

Cash 550
Accounts Receivable—Kim Joyce 550

Nov.15 Cash 650

Accounts Receivable—Kim Joyce 650
 PROBLEM 19
(b)
Dec.31 Bad Debts Expense 11,000
Allowance for Doubtful Accounts 11,000
($550,000 × 2%)
(c)
Allowance for DA,beg. $6,000
Accounts written off (5,200)
Recovery 1,200
Provision for DA 11,000

Balance,Dec.31, 2021 $13,000

 PROBLEM 20
Accounts receivable – January 1 560,000
(530,000 + 30,000)
Charge sales 5,250,000
Accounts written off but recovered 10,000
Total 5,820,000
Collections from customers (5,150,000)
(5,200,000 – 50,000)
Write off (35,000)
Merchandise returns (25,000)
Allowance to customers for shipping damages (15,000)
Accounts receivable – December 31 595,000
 PROBLEM 21

Accounts receivable - 0-15 days $100,000

50% of customers take 2% discount × 1%

Allowance for discounts at 12/31/19 $ 1,000

 PROBLEM 22

Allowance for uncollectible accounts:

Beginning balance (given) $40,000
Add expense (squeezed) 10,000
Subtotal (added up) 50,000
Subtract write offs (none given) 0
Ending balance (calculated) $50,000

JE for above:

Bad debt expense $10,000

Allowance for uncollectible accounts $10,000
 PROBLEM 23

Trade accounts receivable P 775,000

Trade notes receivable 100,000
Installments receivable 300,000
Advance payments 150,000
Claims from insurance company 15,000
Subscription receivable 300,000
Accrued interest receivable 10,000
Trade & other receivables P1,650,000
 PROBLEM 24

Notes receivable-January 1, 2013 6,000,000

Principal payment on December 31, 2013:
Annual payment 1,975,400
Interest (12% x 6,000,000) (720,000) 1,255,400

Carrying amount-December 31, 2013 4,744,600

 PROBLEM 25
Year Interest Principal Total
YEAR 1(P1,200, 000 x 4%) P48, 000 P 400,000 P448, 000
YEAR 2 (P800, 000 x 4%) 32,000 400,000 432,000
YEAR 3(P400, 000 x 4%) 16,000 400,000 416,000
P96, 000 P1, 200,000 P1, 296,000

Year Cash to be received PVF Present value

YEAR 1 P448, 000 0.90909 P 407, 272

YEAR 2 432,000 0.82645 357,026
YEAR 3 416,000 0.75132 312,549
P1, 296,000 P 1, 076,847

Net present value of note P1, 076,847

Less: cost of land 800,000
Gain on sale of land P 276,847
 PROBLEM 26

Present value of note 2,825,000

(500,000 x 5.65)
PROBLEM 27
Present value of note, Jan 1, 2020 P142,356
Add: interest income in 2020 17,083
(P142, 356x12%)
Present value of note, Jan 1, 2021 159,439
Add: interest income in 2021 19,133
(159,439x12%)
Present value of note, Jan. 1, 2022 178,572
Face value of the note 200,000
Discount amortization at P 21,428
 PROBLEM 28

Loan receivable 1,500,000

Direct origination cost 40,000
Total 1,540,000
Origination fee received
from borrower (1,500,000x4%) (60,000)

Carrying amount 1,480,000

 PROBLEM 29

Present value of principal 367,500

(500,000x 0.735)
Present value of interest 294,000
(80,000x5 =400,000 x 0.735 )
Total present value of loan 661,500

Loan receivable 1,000,000

Present value of loan 661,500
Loan impairment loss 338,500
 PROBLEM 30
SCHEDULE OF CASH FLOWS:

12/31/2021 no interest payment

12/31/2022 no interest payment
12/31/2023 interest payment 360,000
(9%x 4,000,000)
12/31/2024 interest payment 360,000
12/31/2025 interest payment 360,000
12/31/2026 interest payment 360,000
12/31/2026 principal payment 4,000,000
 PROBLEM 30

PRESENT VALUE OF CASH FLOWS:

12/31/2023 (360,000x 0.772) 277,920

12/31/2024 (360,000x 0.708) 254,880
12/31/2025 (360,000x 0.650) 234,000
12/31/2026 (4,360,000x 0.596) 2,598,600
Total present value of loan 3,365,360

Loan receivable 4,000,000

Present value of loan 3,365,360
Loan impairment loss 634,640
 PROBLEM 31

Cash 5,000,000
Receivable from factor 300,000
Allowance for bad debts 250,000
Loss on factoring 450,000
Accounts receivable 6,000,000
 PROBLEM 32

Accounts receivable 6,000,000

Factor’s holdback ( 600,000)
(10% x 6,000,000)
Commission ( 900,000)
(15% x 6,000,000)
Cash received 4,500,000
 PROBLEM 33

Principal 500,000
Add: interest(500,000 x 8%) 40,000
Maturity value 540,000
Less: discount(540,000 x 10% x 6/12) 27,000
Net proceeds 513,000
 PROBLEM 33

Principal 500,000
Accrued interest receivable 20,000
(500,000 x 8% x6/12)
Carrying amount of note receivable 520,000
Net proceeds 513,000
Carrying amount of note receivable (520,000)
Loss on NR discounting ( 7,000)
 PROBLEM 34

Principal 500,000
Add: interest(500,000 x 10%) 50,000
Maturity value 550,000
Less: discount(550,000 x 12% x 6/12) 33,000
Net proceeds 517,000
 PROBLEM 35

Note payable 5,000,000

Discount(5,000,000 x 12%) ( 600,000)
Net proceeds 4,400,000
Effective interest rate = discount/net proceeds
= 600,000/4,400,000
= 13.6%
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