Illustrative Example 2

1.
Tranvia Company had the following balances on December 31, 2022:

Cash in checking account 350,000
Cash in money market account 750,000
Treasury bill, purchased Nov. 1, 2022 3,500,000
Maturing Jan. 31, 2023
Time deposit, purchased Dec. 1, 2022 4,000,000
Maturing Mar. 31, 2023(hindi sya kasali sa cash and cash equivalents kasi more than 3 months
na sya, dapat ay march 1 and consider na sya as investments
What amount should be reported as cash and cash equivalents on December 31, 2022
a. 1,100,000
b. 3,850,000
c. 4,600,000
d. 8,600,000
Solution:
Cash in checking account 350,000
Cash in money market account 750,000
Treasury bill, purchased Nov. 1, 2022 3,500,000
Maturing Jan. 31, 2023
TOTAL 4,600,000
2. Pygmalion Company had the following balances on December 31, 2022

Cash in bank – current account 5,000,000
Cash in bank – payroll account 1,000,000
Cash on hand 500,000
Cash in a bank-restricted account for 3,000,000
Building construction to be disbursed in 2023(hindi kasama sa cash and cash equivalents kasi sya
is considered as the acquisition of property,plant and equipment)
Time deposit, purchased Dec 15, 2022, and 2,000,000
Due Mar 15, 2023
Note:
The cash on hand included a 200,000 check payable to Pygmalion, dated January 15, 2023.
What total amount should be reported as cash and cash equivalents on December 31, 2022
a. 6,300,000
b. 8,300,000
c. 6,500,000
d. 8,700,000
SOLUTION:
Cash in bank – current account 5,000,000
Cash in bank – payroll account 1,000,000
Cash on hand(500,000-200,000) 300,000
*magiging negative ang cash on hand
*ung 200,000 check payable ay postdated check
*kaya magiging 300,000 na lang ang cash on hand
Time deposit, purchased Dec 15, 2022, and 2,000,000
Due Mar 15, 2023
TOTAL 8,300,000
3. Campbell Company had the following account balances on December 31, 2022
Petty cash fund 50,000
Cash in Bank – current account 4,000,000
Cash in Bank – payroll account 1,200,000
Cash in bank – sinking fund 2,000,000
Cash on hand 500,000
Cash in bank – restricted account for plant 1,500,000
Addition and expected to be disbursed in 2023(HINDI KASAMA KASI PPE SYA)
Treasury bills 1,000,000
The petty cash fund included unreplenished December 2022 petty cash expense vouchers 5,000
and an employee IOU of 5,0000.
The cash on hand included a 100,000-customer check payable to Campbell dated January 15,
2023
In exchange for a guaranteed line of credit, the entity has agreed to maintain a minimum
balance of 200,000 in the unrestricted current bank account. *NO EFFECT- BECOZ ITO UNG
MINIMUM BALANCE
*KAPAG UNRESTRICTED UNG PERA- MAGAGALWA UNG PERA
*KAPAG RESTRICTED UNG PERA- DI MAGAGALAW UNG PERA
The sinking fund is set aside to settle a bond payable that is due on June 30, 2023.*CURRENT
LIABILITY KASI MAMABAYADAN SYA WITHIN 1 YEAR
Which total amount should be reported as cash and cash equivalents on December 31, 2022?
a. 8,640,000
b. 7,440,000
c. 7,640,000
d. 5,640,000
SOLUTION:
Unreplenished (5,0000)
Employee IOU (5,0000)
TOTAL Petty cash fund 40,000
Cash in Bank – current account 4,000,000
Cash in Bank – payroll account 1,200,000
Cash on hand (500,000-100,000) 400,000
*POSTDATED CHECK ULIT SI 100,000
Cash in bank – sinking fund 2,000,000
Treasury bills 1,000,000
TOTAL: 8,640,000
4. Yasmin Company provided the following information on December 31, 2022
Current account – First Bank 4,000,000
Current account – Second Bank (Overdraft) (250,000)
Money market placement – Third Bank 1,000,000
Time deposit – Fourth Bank 2,000,000
A check for 100,000 was drawn against First Bank current account dated and recorded
December 29, 2022 but delivered to payee on January 15, 2023. *UNRELEASED CHECK- EFFECT
NITO SA CASH AY “DAGDAG KASI DI PA NADEDEDUCT”. MADEDEDUCT SYA KAPAG NARELEASE
NA.
The Fourth Bank time deposit is set aside for land acquisition in early January 2023.
What total amount should be reported as cash and cash equivalents on December 31, 2022?
a. 5,050,000
b. 5,150,000
c. 4,900,000
d. 4,150,000
SOLUTION:

Unreleased check 100,000

Money market placement – Third Bank 1,000,000
TOTAL: 5,150,000

Illustrative Example 2

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1.

Tranvia Company had the following balances on December 31, 2022:

2. Pygmalion Company had the following balances on December 31, 2022

Petty cash fund 50,000

Current account – First Bank 4,100,000

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