HOMEWORK ON CASH

Problem 1

The cash account in Crisostomo Company’s ledger on December 31, 2018 showed a balance of P500,000 which
included the following:

Petty cash fund P 15,000

Cash in sinking fund 120,000
Vouchers paid out of collection, not yet recorded 30,000
Undeposited receipts, including a postdated check of P20,000 60,000
Cash in Bank 250,000
IOUs signed by personnel 25,000

At what amount should Crisostomo Company report as “cash” on the December 31, 2018 statement of financial
position?

Problem 2

Ibarra Company has the following bank accounts:

Overdrawn checking account – PNB (P70,000)

Payroll account – BPI 320,000
Value added tax account – BPI 180,000

In addition to the bank accounts, the following items are on hand:

Employee’s NSF check P15,000

Postage stamps 800
IOU from the president 40,000
Traveler’s check 30,000
Customer’s check undeposited for lack of countersignature 20,000
Money order 50,000
Petty cash fund (expense receipts of P9,000) 12,000

What is the cash balance to be reported on the statement of financial position?

Problem 3

Rizal Company had the following balances at December 31, 2018:

Cash in checking account P500,000

Cash in money market account – 60 days 200,000
Treasury bill, purchased Dec. 1, 2018 maturing Feb 28, 2019 500,000
Treasury note, purchased Mar. 1, 2018 maturing Feb. 28, 2019 700,000

What amount should Rizal Company report as cash and cash equivalents in its December 31, 2018 statement of
financial position?

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Problem 4

At December 31, 2018, Blanco Company had the following balances in the accounts it maintains at Philtrust Bank:

Checking account # 101 P2,000,000

Checking account # 201 (200,000)
Time deposit account – 30 days 350,000
90-day treasury bill, due Mar. 1, 2019 400,000
Travel fund 125,000
180-day treasury bill due Apr. 1, 2019 875,000

Blanco Company classifies investments with original maturities of three months or less as cash equivalents.

In its December 31, 2018 statement of financial position, what amount should Blanco Company report as cash and
cash equivalents?

Problem 5

The following information pertains to Mapa Company on December 31, 2018:

Correct cash balance in general checking account with BDO bank P700,000
Overdraft in special checking account with Export bank (25,000)
Cash accumulated in special fund that will be used for plant expansion 3,200,000
Cash surrender value 75,000
Cash travel advances in the hands of company salespersons 30,000
Currency and coins in petty cash fund (including unreplenished vouchers of P2,500) 10,000

What is the total amount that Mapa Company should report as “cash” in the current assets section of the statement
of financial position on December 31, 2018?

Problem 6

The controller of La Patria Co. is attempting to determine the amount of cash and cash equivalents to be reported on
its December 31, 2018, statement of financial position. The following information is provided.
1. Savings account of P600,000 and checking account balance of P800,000 are held at Philippine
Development Bank.
2. Money market fund account held at Manila Commercial Inc. , a mutual fund organization, permits La
Patria to write checks on this balance, P5,000,000.
3. Travel advances of P180,000 for executive travel for the first quarter of next year (employee to reimburse
through salary deduction).
4. Restricted cash for the retirement of long-term bonds payable, P2,000,000.
5. Petty cash fund, P10,000.
6. An I.O.U. from Liam Kuh, a company employee, P15,000.
7. A bank overdraft of P100,000 has occurred at one of the banks the company uses to deposits its cash
receipts. At the present time, the company has no deposits at this bank.
8. The company has two certificates of deposit (CDs), each totaling P700,000. These CDs have a maturity of
190 days.
9. La Patria has received a check dated January 3, 2019.
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 10. La Patria agreed to maintain a cash balance of P300,000 at all times at Banco de Manila to ensure future
credit availability.
11. La Patria purchased P2,000,000 of commercial paper of ALV Savings and Loan Association which is due
in 60 days.
12. Currency and coins on hand amounted to P5,600.

In its December 31, 2018 statement of financial position, what amount should Blanco Company report as cash and
cash equivalents?

Problem 7

The petty cash fund of Bracken Company on December 31, 2018 is composed of the following:

Currencies P4,800
Coins 2,200
Petty cash vouchers:
Stationery 2,500
Gasoline and oil 4,820
Taxi fare 500
Repairs of computer 580
Snacks to clients 1,200
A check drawn by Bracken Company to the order of J. Alonzo, petty
cash custodian representing her salary 7,000
A sheet of paper with the names of several employees together with a
contribution for a wedding gift. Attached to the sheet of paper is a
currency of 1,400

The petty cash general ledger has an imprest balance of P25,000.

What is the correct petty cash balance on December 31, 2018?

Problem 8

An account of the petty cash fund showed composition as follows:

Coins and currency P2,500

Paid vouchers
Transportation P 900
Gasoline 600
Office Supplies 550
Postage Stamps 350
Due from employees 1,100 3,500
Employee’s check returned by bank marked “NSF” 1,500
Check drawn by company to the order of petty cash custodian 4,500

What is the correct amount of petty cash fund?

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Problem 9

On August 1, 2018, Samson Company established an imprest petty cash fund for P15,000 by writing a check drawn
against its general checking account. On August 23, the fund contained the following:

Currency and coins P 500

Receipts for office supplies 7,000
Vouchers for advances to company drivers 4,000
Receipts for transportation 1,500
Receipt for notary fee 1,200
Receipts for postage still unused 300

On August 24, the company wrote a check to replenish the fund.

What is the amount of replenishment under the imprest fund system?

Problem 10

The statement of financial position of Plaridel Company as of December 31, 2018 showed a cash balance of
P400,000. It was found to include the following items:

Postal money order from customers P 100,000

Note receivable in the possession of a collection agency 150,000
Customer’s postdated checks 30,000
Customer’s checks returned by bank marked “NSF” 50,000
Currencies and coins on hand 60,000
Petty cash fund 10,000

It was determined that check of P200,000 in payment of an equipment was drawn and recorded on December 31,
2018 but delivered to the payee on January 5, 2019.

What is the correct cash balance on December 31, 2018?

Problem 11

Juan Company’s checkbook balance on December 31, 2018 was P900,000. In addition, Juan Company held the
following items in its safe on December 31:

Check payable to Juan Co., dated January 5, 2019, not included in December 31
checkbook balance P200,000
Check payable to Juan Co., 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, 2019 and cleared on January 3, 2019. 50,000
Check drawn on Juan Co.’s account and payable to a vendor, dated and recorded
December 31 but not mailed until January 15, 2019. 150,000

What is the proper amount to be shown as cash on Juan Co.’s statement of financial position on December 31,
2018?

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Problem 12

The cash balance of Dapitan Company consist of the following on December 31, 2018:

Cash on hand, including customer postdated check of P50,000 P550,000

Cash in bank, net of bank overdraft of P20,000 in a checking account with another
bank 350,000
Petty cash, including IOU from employee of P13,000 20,000
Savings deposits, earmarked for acquisition of machinery 350,000

What is the correct cash balance?

Problem 13

Nueva Caceres Company had the following account balances at December 31, 2018:

Cash in bank P2,500,000

Cash on hand 10,000
Cash legally restricted for addition to plant and expected to be
disbursed in 2019 1,500,000

Cash in bank includes P200,000 compensating balances against short-term borrowing arrangements. The
compensating balances are legally restricted as to withdrawal by Nueva Caceres Company.

In the current assets section of Nueva Caceres Co.’s December 31, 2018 statement of financial position, how much
should be reported as cash?

Problem 14

Ultimo Company’s checkbook balance on December 31, 2018 was P1,200,000. The same date, Ultimo Co. held the
following items in its safe:

a. A P60,000 check payable to Ultimo Co., dated January 2, 2019 that was excluded in the December 31
checkbook balance.
b. A P40,000 check payable to Ultimo Co. deposited December 22 and included in the December 31 checkbook
balance that was returned by the bank on December 30 marked “NSF”. The check was redeposited January 3,
2019 and cleared January 5, 2019.
c. There were 24 blank check forms.
d. A P200,000 check payable to a supplier and drawn on Ultimo Co.’s account that was dated and recorded
December 31 but not mailed until January 3, 2019.

What amount of cash should Ultimo Co. report on its December 31, 2018 statement of financial position?

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Problem 15

The December 31, 2018 cash and cash equivalents of La Solar Co. includes the following items:

Cash on hand P 250,000

Petty cash fund 10,000
Security Bank account 1,250,000
PNB Current account No.1 450,000
PNB Current account No.2 (25,000)
BSP treasury bill- 60 days 3,500,000
BPI time deposit – 30 days 1,000,000

Other information:
a. The cash on hand includes a customer postdated check of P5,000, NSF customer check of P10,000 and
postal money order of P5,000.
b. The petty cash fund includes unreplenished petty cash vouchers for P3,000 and an employee check for
P5,000 dated January 5, 2019.
c. A check for P250,000 was drawn against Security Bank account dated January 5, 2019, delivered to the
payee and recorded December 31, 2018.
d. The BPI time deposit is set aside for acquisition of land to be used as factory site.

Compute the following:

1. Cash on hand
2. Petty cash fund
3. Security Bank current account
4. Cash and cash equivalents

Problem 16

The following information has been extracted from the cash records of Del Pilar Ltd and shows four independent
situations. Assume there were no direct bank debits or credits on the bank statement and that all outstanding
deposits and unpresented checks in one month appeared on the bank statement in the following month.

a. The total of outstanding deposits on the 30 April bank reconciliation statement was P1,875. During May,
the company made deposits of P40,200 to its bank account but the bank statement showed that only
P39,840 was deposited during the month.

b. The total of unpresented checks on the 30 April bank reconciliation statement was P1,440. During May,
the total of checks issued was P29,175 but the bank statement showed that only P27,720 in check were
presented during the month.

c. During July, deposits recorded on the bank statement totaled P46,200, but deposits according to the
company’s records were P43,950 and outstanding deposits at 31 July were P4,125.

d. In July, cash payments according to Del Pilar Ltd records were P40,800, checks presented and shown on
the bank statement were P43,000 and unpresented checks at 31 July were P3,960.

1. In situation a, what were the outstanding deposits at 31 May?

2. In situation b, what were the unpresented checks at 31 May?
3. In situation c, what were the outstanding deposits at 30 June?
4. In situation d, what were the unpresented checks at 30 June?

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Problem 17

The accountant for the Luna Company assembled the following data:

June 30 July 31
Cash account balance P 15,822 P 39,745
Bank statement balance 107,082 137,817
Deposits in transit 8,201 12,880
Outstanding checks 27,718 30,112
Bank service charge* 72 60
Customer's check deposited July 10, returned by bank on July 16 8,250
marked NSF, and redeposited immediately; no entry made on
books for return or redeposit
Collection by bank of company's notes receivable 71,815 80,900
* (Recorded on books in month following charge or collection)

The bank statements and the company's cash records show these totals:
Disbursements in July per bank statement P218,373
Cash receipts in July per Luna's books 236,452
Checks written in July per Luna's books 212,529
Receipts in July per bank statement 249,108

Prepare proof of cash.

September 2018