Cash & Cash Equivalents

Page 1 of 4
REVIEW OF FINANCIAL ACCOUNTING THEORY AND PRACTICE

CASH AND CASH EQUIVALENTS
1. The following data pertain to Angat Corporation on December 31, 2005:
Current account at Metrobank
Current account at BPI
Payroll account
Foreign bank account restricted (in equivalent pesos)
Postage stamps
Employees post dated check
IOU from controllers sister
Credit memo from a vendor for a purchase return
Travelers check
Not-sufficient-funds check
Money order
Petty cash fund (P4,000 in currency and expense receipts for
P6,000)
Treasury bills, due 3/31/06 (purchased 12/31/05)
Treasury bills, due 1/31/06 (purchased 1/1/05)
P2,000,000
(100,000)
500,000
1,000,000
1,000
4,000
10,000
20,000
50,000
15,000
30,000
10,000
200,000
300,000
Based on the above information, compute for the cash and cash equivalent that would
be reported on the December 31, 2005 balance sheet.
a. P2,784,000
c. P2,790,000
b. P3,084,000
d. P2,704,000
2. The following data pertain to Balagtas Corporation on December 31, 2005:
Checkbook balance
Bank statement balance
Check drawn on Balagtas account, payable to supplier, dated and
recorded on Dec. 31, 2005, but not mailed until Jan. 15, 2006
Cash in sinking fund
Money market, three months due January 31, 2006
P10,000,000
15,000,000
3,000,000
4,000,000
5,000,000
On December 31, 2005, how much should be reported as cash and cash equivalents?
a. P13,000,000
c. P18,000,000
b. P12,000,000
d. P17,000,000
3. On December 31, 2005, Baliuag Company had the following cash balances:
Cash in bank
Petty cash fund (all funds were reimbursed on December 31, 2005)
Time deposit
Saving deposit
P15,000,000
50,000
5,000,000
2,000,000
Cash in bank includes P500,000 of compensating balance against short term borrowing
arrangement at December 31, 2005. The compensating balance is legally restricted as
to withdrawal by Baliuag. A check of P300,000 dated January 15, 2006 in payment of
accounts payable was recorded and mailed on December 31, 2005. In the current
assets section of the December 31, 2005 balance sheet, what amount should be
reported as cash and cash equivalents?
a. P21,850,000
c. P21,800,000
b. P16,850,000
d. P14,850,000
Page 2 of 4
4. Bocaue Company had the following account balances on December 31, 2005.
Petty cash fund
Cash in bank current account
Cash in bank payroll account
Cash on hand
Cash in bank restricted account for plant additions, expected to
be disbursed in 2006
Treasury bills, due February 15, 2006
P50,000
10,000,000
2,000,000
500,000
4,000,000
3,000,000
The petty cash fund includes unreplenished December 2005 petty cash expense
vouchers of P20,000 and employee IOUs of P10,000. The cash on hand includes a
P100,000 check payable to Bocaue dated January 15, 2006. What should be reported
as cash and cash equivalents on December 31, 2005?
a. P12,420,000
c. P15,420,000
b. P19,420,000
d. P15,450,000
5. Bulacan Corporation's checkbook balance on December 31, 2005, was P800,000. In
addition, Bulacan held the following items in its safe on December 31:
Check payable to Bulacan Corporation, dated January 2, 2006, not
included in December 31 checkbook balance
Check payable to Bulacan Corporation, 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, 2006, and cleared January 7
Post-dated checks
Check drawn on Bulacan Corporation's account, payable to a vendor,
dated and recorded December 31, but not mailed until January 15,
2006
P200,000
40,000
15,000
100,000
The proper amount to be shown as cash on Bulacan's balance sheet at December 31,
2005, is
a. P760,000
c. P860,000
b. P800,000
d. P975,000
6. You noted the following composition of Hagonoy Companys cash account as of
December 31, 2005:
Demand deposit account
Time deposit 30 days
NSF check of customer
Money market placement (due June 30, 2006)
Savings deposit in a closed bank
IOU from employee
Pension fund
Petty cash fund
Customer check dated January 1, 2006
Customer check outstanding for 18 months
Total
P2,000,000
1,000,000
40,000
1,500,000
100,000
20,000
3,000,000
10,000
50,000
40,000
P7,760,000
Additional information follows:

a) Check of P200,000 in payment of accounts payable was recorded on December 31,
2005 but mailed to suppliers on January 5, 2006.
b) Check of P100,000 dated January 15, 2006 in payment of accounts payable was
recorded and mailed on December 31, 2005.
Page 3 of 4
c) The company uses the calendar year. The cash receipts journal was held open
until January 15, 2006, during which time P400,000 was collected and recorded on
December 31, 2005.
The cash and cash equivalents to be shown on the December 31, 2005 balance sheet
is
a. P3,310,000
c. P1,910,000
b. P2,910,000
d. P4,410,000
7. The following information pertains to Bustos Company as of December 31, 2005:
Cash balance per general ledger
Cash balance per bank statement
Checks outstanding (including certified check of P100,000)
Bank service charge shown in December bank statement
Error made by Bustos in recording a check that cleared the bank in
December (check was drawn in December for P500,000
but recorded at P700,000)
Deposit in transit
P15,000,000
14,550,000
1,000,000
50,000
200,000
1,500,000
At the December 31, 2005 balance sheet cash in bank should be

a. P15,150,000
c. P14,250,000
b. P14,650,000
d. P14,550,000
8. The bookkeeper of Calumpit Company recently prepared the following bank
reconciliation on December 31, 2005:
Balance per bank statement
Add: Deposit in transit
Checkbook and other bank charge
Error made by Calumpit in recording check No.
1005 (issued in December)
Customer check marked DAIF
Total
Deduct: Outstanding checks
Note collected by bank (includes P200,000 interest)
Balance per book
20,000,000
1,500,000
50,000
150,000
500,000
1,900,000
2,300,000
2,200,000
22,200,000
4,200,000
18,000,000
Calumpit has P1,000,000 cash on hand on December 31, 2005. The amount to be
reported as cash on the balance sheet as of December 31, 2005 should be
a. P19,600,000
c. P20,600,000
b. P18,600,000
d. P19,750,000
9. The petty cash fund of Guiguinto Company on December 31, 2005 is composed of the
following:
Coins and currencies
Petty cash vouchers:
Gasoline payments
Supplies
Cash advances to employees
Employees check returned by bank marked NSF
Check drawn by the company payable to the order of Kristine
Anson, petty cash custodian, representing her salary
A sheet of paper with names of employees together with contribution
for a birthday gift of a co-employee in the amount of
Total
P14,000
3,000
1,000
2,000
5,000
20,000
8,000
P53,000
Page 4 of 4
The petty cash ledger account has an imprest balance of P50,000. What is the correct
amount of petty cash on December 31, 2005?
a. P34,000
b. P39,000
c. P14,000
d. P42,000
10. The Plaridel Corporation was organized on January 3, 2005 with an authorized capital
stock of P5,000,000. At December 31, 2005 of the same year, the general ledger of
said Company showed the following accounts and balances:
Accounts receivable
Merchandise inventory
Land
Building
Furniture and fixtures
Accounts payable
Notes payable bank
Common stock
Additional paid capital
Sales
Expenses paid (excluding purchases)
P 200,000
250,000
1,200,000
1,600,000
400,000
420,000
500,000
1,500,000
100,000
5,800,000
725,000
Your review of the bank statement for December disclosed the following information:
Bank balance, December 31, 2005
Bank service charge
Deposits in transit
Total checks not returned by the bank
P 524,500
6,000
62,500
128,000
Your review also revealed that the cash received of P62,500 on December 31, 2005
was deposited on January 2, 2006. The companys mark up on sales is 40%.
How much is the adjusted cash balance as of December 31, 2005?
a. P459,000
c. P39,000
b. P536,000
d. P1,619,000
11. Reconciliation of Malolos Corporations bank account at November 30, 2005 follows:
Balance per bank statement
Deposits in transit
Checks outstanding
Correct cash balance
P3,150,000
450,000
(45,000)
P3,555,000
Balance per books

Bank service charge
Correct cash balance
P3,558,000
(3,000)
P3,555,000
December data are as follows:

Checks recorded
Deposits recorded
Collection by bank (P600,000 plus interest)
NSF check returned with December bank statement
Balances
Bank
P3,450,000
2,430,000
630,000
15,000
2,745,000
The checks outstanding on December 31, 2005 amount to

a. P45,000
b. P135,000
c. P90,000
- end -
Books
P3,540,000
2,700,000
2,715,000
d. P0

Cash & Cash Equivalents

Uploaded by

Copyright:

Available Formats

Cash & Cash Equivalents

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Cash & Cash Equivalents

Uploaded by

Copyright:

Available Formats

What are the main components of cash and cash equivalents?

What factors should be considered in determining the cash amount reported on the balance sheet?

Page 1 of 4

REVIEW OF FINANCIAL ACCOUNTING THEORY AND PRACTICE

Additional information follows:

At the December 31, 2005 balance sheet cash in bank should be

Balance per books

December data are as follows:

The checks outstanding on December 31, 2005 amount to

You might also like