Cash Set C 4w1b2t

1 PRACTICAL ING 1 – REVIEW STATEMENT OF FINANCIAL POSITION CASH & CASH EQUIVALENTS (SET C)

PROF. U.C. VALLADOLID Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 1. The Skogsberg Corporation had the following items at a balance sheet date: Checking at Sun Trust Bank Checking at Bank of America Checking at First Union Bank Checking at Republic Bank Postdated check from customer Savings at Sun Trust Bank Money market fund at Sun Trust (with checking privileges) Deposit at telephone company (required for service) NSF check received from customer (reflected as a positive amount in a bank balance above) Change fund Cash from customer not yet deposited in bank

P 12,400 10,500 (3,000) 5,100 600 32,000 40,000 1,000 210 450 1,750

Compute the amount to be reported with the “Cash” caption in current assets at the balance sheet date. A. P101,990 B. P100,560 C. P99,560 D. P105, 306 2. You were able to gather the following from the December 31, 2017 trial balance of Cruz Corporation in connection with your audit of the company: Cash on hand Petty cash fund

P 500,000 10,000

BPI current

1,000,000

Security Bank current No. 01

1,080,000

Security Bank current No. 02

(80,000)

PNB savings PNB time deposit

1,200,000 500,000

Cash on hand includes the following items: Customer’s check for P40,000 returned by bank on December 26, 2017 due to insufficient fund but subsequently redeposited and cleared by the bank on January 8, 2018. Customer’s check for P20,000 dated January 2, 2018, received on December 29, 2017. Postal money orders received from customers, P30,000. The petty cash fund consisted of the following items as of December 31, 2017. Currency and coins Employees’ vales

P 2,000 1,600

Currency in an envelope marked “collections for charity” with names attached Unreplenished petty cash vouchers

1,200 1,300

2 Check drawn by Cruz Corporation, payable to the petty cashier

4,000 P10,100

Included among the checks drawn by Cruz Corporation against the BPI current and recorded in December 2017 are the following: Check written and dated December 29, 2017 and delivered to payee on January 2, 2018, P80,000. Check written on December 27, 2017, dated January 2, 2018, delivered to payee on December 29, 2017, P40,000. The credit balance in the Security Bank current No. 2 represents checks drawn in excess of the deposit balance. These checks were still outstanding at December 31, 2017. The savings deposit in PNB has been set aside by the board of directors for acquisition of new equipment. This is expected to be disbursed in the next 3 months from the balance sheet date. Based on the above and the result of your audit, determine the adjusted balances of following: 1. Cash on hand a. P410,000

c. P470,000

b. P530,000

d. P440,000

2. Petty cash fund a. P6,000

c. P2,000

b. P7,200

d. P4,900

3. BPI current a. P1,000,000

c. P1,080,000

b. P1,120,000

d. P1,040,000

4. Cash and cash equivalents a. P2,917,200

c. P3,052,000

b. P3,074,900

d. P3,066,000

3. Below are items pertinent to Dalisay Company’s cash and cash equivalent: Commercial savings of P1,200,000 and a commercial checking balance of P1,800,000 are held at BPI Bank. Travel advances of P360,000 for executive travel for the first quarter of the next year (employee to reimburse through salary deduction). A separate cash fund in the amount of P3,000,000 is restricted for the retirement of a long term debt. Petty cash fund of P10,000. An I.O.U. from a company officer in the amount of P40,000. A bank overdraft of P250,000 has occurred at one of the banks the company uses to deposit its cash receipts. At the present time , the company has no deposits at this bank.

3 The company has two certificates of deposit, each totaling P1,000,000. These certificates of deposit have maturity of 120 days. Dalisay has received a check dated January 2, 2018 in the amount of P150,000. Dalisay has agreed to maintain a cash balance of P200,000 at all times at BPI Bank to ensure future credit availability. Currency and coin on hand amounted to P15,000. How much will be reported as cash and cash equivalent at Dec. 31, 2017? a. P3,025,000

B.

P2,575,000

C. P2,825,000

D. P5,025,000

4. The “CASH” of Joaquin Corporation’s ledger on December 31, 2017 showed the following: a. Petty cash fund (including P7,500 unreplenished voucher of which P2,400 is dated January 3, 2018)

P15,000

b. Redemption Fund – PNB

500,000

c. Traveler’s check

100,000

d. Money order

10,000

e. Treasury bill, purchased December 1, 2017 (due on Feb. 1, 2018)

50,000

f.

50,000

Time deposit due on March 31, 2018

g. 180-day Treasury bill, due March 15, 2018

120,000

h. Note receivable in the possession of a collecting agency i.

PNB – Checking #211-009-091

j.

Cash on hand, including customer postdated check of P15,000

325,900

k. Savings deposit, earmarked for acquisition of equipment l.

20,000

23,000 210,000

A check payable to San Ignacio Incorporated, dated January 5, 2018, that was included in the December 31 PNB Checking #211-009-091

50,000

m. Bond Sinking Fund (used to finance the maturing long-term obligation on March 31, 2018)

150,000

n. Overdraft in PNB Checking #211-099-085

( 50,000)

o. Check #801 in payment to s Payable, dated Dec. 31, 2017 not mailed until January 5, 2018

20,000

p. Advances to Officers/Employees for Seminars (no liquidation is required)

80,000

q.

Money market placement (due June 30, 2018)

600,000

r.

Listed stock held as temporary investment

100,000

s. Check #789 in payment to Suppliers, dated January 5, 2018 and recorded December 31, 2017.

35,000

t.

Customers’ certified checks

10,000

u.

Pension Fund

150,000

TOTAL

P 2,568,900

What Joaquin Corporation’s adjusted cash and cash equivalents balance at December 31, 2017 is: a. 618,800

b.623,800

c. 673,800

d. 723,800

4

5. Jennifer Incorporated established a petty cash fund of P5,000 for incidental expenses on June 1, 2017. At the end of the month, the count of cash on hand indicated that P670.40 remained in the fund. A review of the petty cash vouchers disclosed the following expenses had been incurred during the month: Office supplies Transportation Postage Miscellaneous Representation

341.60 1,321.40 780.00 837.60 1,000.00

What is the amount of cash shortage? a. P49 b. P46 c. P94

d. P64

6. You counted the petty cash fund balance of Rainbow Corporation at 9:00 o’clock in the morning of January 2, 2017, and you obtained the following details: Bills and coins 2,500 Paid vouchers (all dated December 2016) for Telephone 1,500 Water 1,600 Office Supplies 3,700 Postage stamps 2,800 IOU's signed by employees 3,900 Envelope containing contribution for a birthday gift to a co-employee 1,000 Company check for fund replenishment 15,000 Unused postage stamps 1,800 Unused office supplies 1,200 1. You ascertained that Rainbow Corporation established a petty cash fund for P35,000. What is the petty cash fund shortage as of January 2, 2017? a. 3,000 b. 5,000 c. 4,000 d. 2,500 2. What is the correct amount of petty cash fund to be shown as part of cash in the statement of financial position as December 31, 2016? a. 17,500 b. 15,000 c. 18,000 d. 5,500 7. In your cash count of the petty cash fund of Canyon Company as of July 4, 2017, you found the following composition of its petty cash fund: Bills and coins counted Approved and signed petty cash vouchers Dated June 2017 Dated July 1-4, 2017 IOU from Joe Santos, an employee A check drawn by Juvy Victoria, an employee, dated July 15, 2017

2,450 3,300 800 1,400 2,000

The petty cash fund has an imprest balance of 10,000. The company’s reporting period ends on June 30. 1. What is the correct balance of the petty cash fund? a. 4,100 b. 3,250 c. 3,850

5 d. 4,450 2. How much is the cash shortage or overage? a. 50 overage b. 50 shortage c. 150 overage d. 150 shortage 8. The books of John's Service, Inc. disclosed a cash balance of P687,570 on December 31, 2016. The bank statement as of December 31 showed a balance of P547,800. Additional information that might be useful in reconciling the two balances follows: Check number 748 for P30,000 was originally recorded on the books as P45,000. A customer's note dated September 25 was discounted on October 12. The note was dishonored on December 29 (maturity date). The bank charged John's for P142,650, including a protest fee of P2,650. The deposit of December 24 was recorded on the books as P28,950, but it was actually a deposit of P27,000. Outstanding checks totaled P98,850 as of December 31. There were bank service charges for December of P2,100 not yet recorded on the books. John's had been charged on December 26 for a customer's NSF check for P12,960. John properly deposited P6,000 on December 3 that was not recorded by the bank. Receipts of December 31 for P134,250 were recorded by the bank on January 2. A bank memo stated that a customer's note for P45,000 and interest of P1,650 had been collected on December 27, and the bank charged a P360 collection fee. 1. What is the adjusted cash in bank balance? a.

P583,200

c.

P589,200

b.

P577,200

d.

P512,400

2. What is the net adjustment to cash as of December 31, 2016? a.

P104,370

c.

P 98,370

b.

P110,370

d.

P175,170

9. Sir Chief Company kept all cash in a checking . An examination of the ing records and bank statement for the month ended June 30, 2016 revealed the following information: The cash balance per book on June 30 is P8, 500,000. A deposit of P1,000,000 that was placed in the bank's night depository on June 30 does not appear on the bank statement. The bank statement shows on June 30, the bank collected note for Sir Chief and credited the proceeds of P950,000 to the entity's . Checks outstanding on June 30 amount to P300,000. Sir Chief discovered that a check written in June for P200,000 in payment of an s payable, had been recorded in the entity's recorded as P20,000. Included with the June bank statement was NSF check for P250,000 that Sir Chief had received from a customer on June 26. The bank statement shows a P20,000 service charge for June. What amount should be reported as cash in bank on June 30, 2016?

6 A. 7,800,000 B. 8,500,000 C. 9,000,000 D. 10,500,000 10. Gordon Company is unable to reconcile the bank balance at January 31. Gordon’s reconciliation is as follows. Cash balance per bank P5,340 Add: NSF check 1,040 Less: Bank service charge 35 Adjusted balance per bank P6,345 Cash balance per books Less: Deposits in transit Add: Outstanding checks Adjusted balance per books What is the adjusted cash balance? a. P4,740 b. P5,815 c. P6,205 d. P4,440 11.

P5,815 850 1,450 P6,415

Blackie Company's bank statement for September 30, showed a cash balance of P1,350. the company's Cash in its general ledger showed a P995 debit balance. The following information was also available as of September 30. A customer's check for P100 marked NSF was returned to Blackie Company by the bank. The bank charged the company's a P25 processing fee. The September 30 cash receipts, P1,250 were placed in the bank's night depository after banking hours on that date and this amount did not appear on the September 30 bank statement. A P15 debit memorandum for checks printed by the bank was included with the canceled checks. Outstanding checks amounted to P1,145. A customer's note for P900 was collected by the bank. A collection fee of P25 was deducted by the bank. Included with the canceled checks was a check for P275, drawn on another company, Black, Inc. What is the adjusted cash balance? a. P1,730 b. P1,870 c. P2,875 d. P1,445

12. At September 30, 2017 , cash receipts and cash disbursements per general ledger Cash in Bank of Mira Company are P30,500 and P24,000, respectively. The bank statement for the same month indicates that only P30,200 in deposits were received during the month and checks clearing the bank were P23,600. The August 31, 2017 bank reconciliation showed deposits in transit of P9,500. Outstanding checks at September 30, 2017 were P2,000. 1. How much was the deposits in transit at September 30, 2017? A.P9,500 B.P9,800 C.P10,200 D.P8,800

7

2. Based on the given above, how much was the outstanding checks at August 31, 2017? A.P1,402 B.P1,505 C.P1,600 D.P1,650 13. You are attempting to determine an apparent cash shortage that you believe resulted from an employee’s theft. You have assembled the following information for the month of March: Cash balance per books, March 1 Cash receipts for March per books Cash disbursements for March per books Cash balance per bank statement, March 31 Deposit in transit, March 31 Outstanding checks, March 31 Bank service charge for March 1. What is the correct cash balance? a. P370,250 b. P382,550

P115,963.70 246,475.00 334,709.10 15,341.40 9,000.00 2,703.80 92.00

c. P483,250

2. What is the amount of cash shortage? a. P3,296.20 b. P592.40 c. P15,933.80

d. P330,250

d. P6,000

14. Edgardo Company was organized on January 2, 2017. The following items are from the company’s trial balance on December 31, 2017. Ordinary share capital Share Merchandise inventory Land Building Furniture & Fixtures s receivable s payable Notes payable-bank Sales Operating expenses(including depreciation of 400,000) Additional information as follows: 1. Deposits in transit, December 31 2. Service charge for December 3. Outstanding checks, December 31 4. Bank balance, December 31 5. Edgardo Company’s mark up on sales is 30% 1. What is the total collections for sale? A. 6,114,967 C. 6,235,200

P1,500,000 150,000 69,000 1,000,000 1,400,000 367,000 165,400 389,650 500,000 6,000,000 1,005,150

P384,660 2,000 475,000 892,000

B. 4,119,240 D. 6,069,800

2. What is the total payments for merchandise purchase? A. 3,905,990 B. 4,649,140 C. 4,043,990 D. 5,914,550

8 15. In reconciling the book and bank balance of the cash of Perlas Corporation, you discover the following for the month of December 2017: Balance per bank statement Balance per books Receipts not yet deposited Bank service charge Customer's check returned by bank marked DAIF

P400,000.00 387,000.00 100,000.00 1,000.00 22,000.00

A paid check for 40,000 was recorded in the cash book as P4,000. 1. Assuming no other errors were noted, what is the amount of the outstanding checks at December 31, 2017? a. P113,000 b. P150,000 c. P172,000 d. P171,000 2. What is the adjusted cash balance on December 31, 2017? a. P329,000 b. P350,000 c. P328,000 d. P2228,000 16. The cashier misplaced all the bank statements for the past year. You reviewed the ing records and discovered that the following journal enry was made to reconcile the June 30, 2017 bank records and ing records:

s Receivable Miscellaneous Expense Notes Receivable Interest Revenue Cash

152,024.00 1,250.00 20,000.00 1,000.00 132,274.00

Pre-adjustment cash balance in the ing records was P768,370., outstanding checks were P20,750 and no other adjustments were required. What is the bank statement balance at June 30,2017? A. P615,346.00 B. P636,096.00 C. P656,846.00 D. P768,370.00 17. Lipton Company shows the following balances in their financial records as of December 31,2017: Checking at Morgan Bank Checking at Land Bank Payroll – National Bank Foreign bank -restricted Postage stamps Employee’s postdated checks I.O.U. from President’s brother Travelers’s check No-sufficient funds check Petty Cash fund (16,000 in currency & expenses receipts for 84,000) Cashier’s checks

P (20,000) 500,000 100,000 750,000 22,000 30,000 75,000 50,000 18,000 100,000 36,000

What is the correct balance to be reported in the statement of financial position of Lipton Company on December 31, 2017? a. 582,000

9 b. 686,000 c. 702,000 d. 704,000 18. An examination on the morning of January 2, 2018 by the auditor for the Kaila Company discloses the following items in the petty cash drawer: Postage stamps P 220.00 Currency and coins 1,156.60 IOUS from of the office staff 1,210.00 An envelope containing collections for a gift for a departing employee, with office names attached 350.00 Petty cash vouchers for miscellaneous expenses (including a PCV for stamps purchased for 450.00) 985.00 Employee's check postdated January 15, 2018 1,500.00 Employee's check marked "DAIF" 1,890.00 Check drawn by Kaila Company to Petty Cash 3,450.00 P 10,760.00 The ledger discloses a P10,500 balance for Petty Cash. 1. How much is the cash shortage or overage as of December 31, 2017? a. P 308.40 c. P 88.40 b. P 41.60 d. P 658.40 2. How much petty cash fund shall be shown as part of "Cash" balance as of December 31, 2017? a. P 10,761.60 c. P 4,606.60 b. P 1,156.60 d. P 5,141.60 19. Emerson Company was incorporated on January 1, 2017 by issuing common stock with a par value of P50,000,000 for P60,000,000. The other transactions that affected the cash during January were: Land and building were purchased for P25,000,000 with a down payment of P10,000,000. A note was signed for the remainder, the property being given as collateral to the note due in six months time only. Bonds with a face amount of P5,000,000 were issued at 120 for additional working capital requirements. A check was written for P7,500,000 to pay for computers and other equipment. A check in the amount of P1,500,000 was written to acquire software technology. A computer unit which did not fit the company’s requirements was sold at its original sales price of P2,000,000 and the cash was deposited in the company’s checking . What is the balance of the checking on January 31, 2017? a. P34,000,000 c. P49,000,000 b. P48,000,000 d. P43,000,000 20. Joshtine Company’s newly hired assistant prepared the following bank reconciliation on December 31, 2017: Book balance Add: December 31 deposit in transit Collection of note Interest on note Total Less: Jerome Company’s deposit to our Bank service charge Adjusted book balance Bank balance Add: Error on check No. 193

P2,810,000 P1,500,000 5,000,000 300,000

2,200,000 90,000

6,800,000 9,610,000

2,290,000 P7,320,000 P11,260,000 9,000

10 Total Less: Preauthorized payments for water bills NSF check Outstanding check Adjusted bank balance

11,269,000 P 248,000 440,000 3,219,000

3,907,000 P7,362,000

Check No. 193 was made for the proper amount P489,000 in payment of . However it was entered in the cash payments journal as P498,000. Joshtine authorized the bank to automatically pay its water bill as submitted directly to the bank. QUESTION: Based on the above and the result of your audit, the correct cash in bank balance as of December 31, 2017 is a. P7,320,000 c. P7,341,000 b. P7,362,000 d. P9,541,000