PROBLEM 1

RIMOS Corporation’s cash and cash equivalents balance as of December 31, 2021 is P9,018,500, the
breakdown is presented below:
Bills and coins P2,000
Customers’ checks 50,000
Money orders 10,000
Postage stamps 1,500
AA Bank Savings Account (Account # 143) 600,000
BB Bank Checking Account (Account # 6414) 1,500,000
BB Bank Checking Account (Account # 6415) (200,000)
CC Bank Checking Account (Account # 10002) (120,000)
DD Bank Savings Account (Account # 9222) 4,800,000
Payroll fund 130,000
Bond sinking fund 1,950,000
Tax fund 240,000
Time deposit 55,000

Additional information:
 The customers’ checks include a check from Mr. Reyes dated January 4, 2022, amounting to
P2,000.
 The negative balances from BB Bank account # 6415 and CC Bank account # 10002 are
overdrafts.
 The balance in the DD Bank account # 9222 is restricted for future plant expansion, expected to
be used starting December of 2022.
 The time deposit has a period of 120 days.

Requirements:
1. Compute for the correct balance of cash and cash equivalents as of December 31, 2021.
2. Determine the correct presentation of those items that are excluded from cash and cash
equivalents.

PROBLEM 2
VICTORIA Corporation reported the following accounts on December 31, 2020:
Cash on hand 1,000,000
Petty cash fund 50,000
Security Bank current account 2,000,000
PNB current account 1,500,000
BDO current account - overdraft (200,000)
BSP treasury bill - 120 days 3,000,000
BPI time deposit - 90 days 2,000,000
Bond sinking fund 2,500,000

Additional information:
 The cash on hand included a customer postdated check of P150,000 and money order of
P50,000
 The petty cash fund included unreplenished petty cash vouchers for P10,000
 The BPI time deposit is set aside for acquisition of land to be made in early January 2021
 The bond sinking fund is set aside for payment of bond payable due December 31, 2021

Requirement: Compute for the total amount of cash and cash equivalents on December 31, 2020.

PROBLEM 3
In determining the amount to be reported on its December 31, 2021 balance sheet as cash and cash
equivalents, BARRY Corp. identified the following items:
 Undeposited receipts (currency and coins on hand), P50,000
 Postal money orders, P90,000
 Traveler’s checks on hand, P120,000
  Money market fund held at BPI that permits Apple Company to write-checks on this fund,
P400,000
 Utility deposit receipt (made to Electron Company), P100,000

Requirement: The amount to be reported by BARRY Corp. under cash and cash equivalents is?

PROBLEM 4
BRYAN Corporation had the following account balances on December 31, 2021:
Petty cash fund 50,000
Cash on hand 500,000
Cash in bank - current account 4,000,000
Cash in bank - payroll account 1,000,000
Time deposit 2,000,000
Cash in bank - restricted account for plant expansion 500,000
Cash in sinking fund 1,500,000

The petty cash fund included unreplenished December 2021 petty cash expense vouchers of P5,000. The
cash on hand included a P100,000 check payable to the entity dated January 31, 2022.

Requirement: What total amount should be reported as cash and cash equivalents on December 31,
2021?

PROBLEM 5
CREAM Company has the following investments of excess cash as of December 31, 2021:
 3-month treasury bill, P200,000
 6-month treasury bill, maturing on February 28, 2022, P300,000
 1-year treasury bill, acquired on December 15, 2021, maturing on February 28, 2022,
P400,000
 90-day Money market placement, P200,000
 30-day Certificate of time deposit, P240,000
 180-day Certificate of time deposit, P180,000
 5,000 cumulative preference shares of BLUE Company held as investment amounting to
P50,000
 1,000 redeemable preference shares of GREEN Company amounting to P100,000; acquired
December 1, 2021; redemption date is January 31, 2022
 20,000 ordinary shares of RED Corporation amounting to P120,000; acquired last November
30, 2021; intended to be traded within three months

Requirement: The amount that may be included as cash equivalents in CREAM Company’s December 31,
2021 statement of financial position is?

PROBLEM 6
CARDO Corporation provided the following information at year-end comprising the cash account:
Cash in bank - demand deposit 5,000,000
Cash on hand 400,000
Postage stamps unused 5,000
Certificate of time deposit - 120 days 1,500,000
Money order 500,000
Manager check 100,000
Postdated customer check 500,000

Requirement: What total amount should be reported as cash at year-end?

PROBLEM 7
ABC Corporation set up a petty cash fund on November 1, 2020, for P20,000.

Various expenses were paid in November. The fund was replenished on November 30, 2020, when the
following breakdown of the fund was as follows:
 Bills and coins P4,200
Transportation expense 8,500
Supplies expense 5,000
Miscellaneous expenses 2,300

On December 1, 2020, the fund was increased to P25,000.

Various expenses were paid in December. As of December 31, 2020, the breakdown of the fund was as
follows:
Bills and coins P2,300
Office repairs expense 14,800
Supplies expense 5,000
Miscellaneous expenses 2,900

The fund was replenished on January 5, 2021.

Requirement:
1. Prepare the journal entries for 2020 related to the petty cash fund using:
a. The imprest fund system
b. The fluctuating fund system
2. What is the balance of Petty Cash Fund as of:
a. November 30, 2020?
b. December 31, 2020?

PROBLEM 8
JEREMY Company decided to establish a petty cash fund to help ensure internal control over its small
cash expenditures. The following information is available for the month of December:
 On December 1, it established a petty cash fund in the amount of P3,000
 A summary of the petty cash expenditures as of December 19 is as follows:
Freight-in charges P1,000
Supplies purchased and used 500
Postage expenses 250
IOU from employees 150
Miscellaneous expenses 300
 The petty cash fund was replenished on December 20. The balance based on a count was P600.
 A summary of the petty cash expenditures as of December 28 is as follows:
Freight-in charges P1,100
Supplies purchased and used 600
Postage expenses 200
IOU from employees 150
Miscellaneous expenses 300

Requirement: Prepare the journal entries to record the transactions related to the petty cash fund under
the following methods:
1. Imprest system
2. Fluctuating system

PROBLEM 9
DREW Company provided the following ledger account of the cash in bank maintained with BPI:
BPI
Dec. 1 Balance 100,000 Dec. 1 Check No. 771 20,000
6 Deposit 30,000 4 Check No. 772 5,000
12 Deposit 40,000 6 Check No. 773 35,000
24 Deposit 50,000 10 Check No. 774 15,000
31 Deposit 60,000 14 Check No. 775 30,000
  18 Check No. 776 25,000
  24 Check No. 777 40,000
The following bank statement was received from BPI by DREW Company.
DREW Corporation
Date   Check No. Withdrawal Deposits Balance
Dec.
1 Balance 130,000
1 768 10,000 120,000
1 771 20,000 100,000
4 772 5,000 95,000
6 773 35,000 30,000 90,000
12 774 15,000 40,000 115,000
12 776 52,000 63,000
24 1042 8,000 50,000 105,000
28 CM 45,000 150,000
28 NSF Check 10,000 140,000
28 Service charge 5,000 135,000

Additional information:
 DREW Company reconciled its bank balance on November 30 with two checks, No. 768 for
P10,000 and No. 770 for P20,000, outstanding.
 Check no. 1042 was drawn by DROW Company. The bank charged it in error to the account of
DREW.
 Check No. 776 was correctly drawn for P52,000 in payment of account. The P25,000 was
entered in the books.
 The bank credit on December 28 represents the proceeds of a P50,000 note, less a collection fee
of P5,000 collected by the bank and credited to the account.
 The NSF check was received from a customer in payment of account.

Requirements:
1. Prepare a bank reconciliation statement using the adjusted balance method.
2. Prepare a bank reconciliation statement using the book-to-bank method.
3. Prepare a bank reconciliation statement using the bank-to-book method.
4. Prepare the adjusting journal entry of DREW Company.

PROBLEM 10
ETHAN Company had the following information on December 31, 2020:
 The company’s books for December 31, 2020 showed a balance of P24,650.
 The bank statement shows a cash balance of P10,500 as of December 31, 2020.
 The deposit in transit for the month of December is P64,050 and the outstanding checks total to
P25,500.
 A credit memo pertaining to a bank loan of P40,000 was not yet recorded by the entity. Debit
memos include a service charge of P1,600 and a charge on the loan for P4,000.
 A book error was discovered wherein a collection of accounts receivable for P1,000 was
recorded as P10,000.
 The bank debits include a check issued by ETHEN Company amounting to P1,000.

Requirements:
1. What is the adjusted cash in bank balance as of December 31, 2020?
2. Prepare the adjusting journal entries for ETHAN Company.

PROBLEM 11
The following were provided by GOOSE Company for the month of April:
 Balance per books April 30, P125,000; per bank statement April 30, P104,000
 Deposits still in transit at April 30 was P47,000
 NSF checks returned by the bank in April was P28,000 and April charges amounted to P6,000
 Checks issued but have not yet cleared by April 30 was P33,000
 Proceeds from loan directly credited to Goose Company’s account amounted to P25,000, while
interest on deposits amounted to P2,000
Requirements:
1. The adjusted balance per book is?
2. The adjusted balance per bank is?