INTERMEDIATE ACCOUNTING 1 PROBLEM I: Banchero Company had the following cash

CASH AND CASH EQUIVALENTS balance on July 31, 2021:

Undeposited coins and currencies 40,000

Cash - refers to money or its equivalent that is Unrestricted demand deposits 1,660, 000
readily available for unrestricted use Company checks written (and deducted
- The world’s most widely used medium of from the above demand deposits) but
exchange and the foundation for accounting not scheduled to be mailed until
measurements August 2, 2021 370,000
- Includes money and any negotiable 90-day time deposit (restricted) 3,000,000
instruments that is payable in money
acceptable by bank for deposit and In exchange for a guaranteed line of credit, Banchero
immediate credit. In other words, cash does has agreed to maintain a minimum balance of P150,000
only pertain to money itself, it may also in its unrestricted demand deposits account.
include checks, bank drafts, and money
order because these are acceptable by How much is the correct cash to be reported in the
statement of financial position as of July 31, 2021?
banks for deposit or available for immediate
encashment.
Cash Equivalents – refers to highly liquid investments PROBLEM II: The cash account of Manuel Corporation
that are acquired within three (3) months before as of December 31, 2021 consist of the following:
maturity.
. Cash collections not yet
Terms to study deposited to the bank P450,000
1. Unrestricted cash Check drawn by the vice president
2. Bank drafts dated January 16, 2022 80,000
3. Money orders Check drawn by a supplier dated
December 28, 2021 for goods
4. Cash on hand/Cash in bank
returned by the company 50,000
5. Postdated checks Petty cash fund, of which P9,000 is in
6. Undelivered checks the form of currencies; P9,000 in
7. Stale checks the form of employees' IOUs;
8. Bank overdrafts and P3,000 is supported by approved
9. Compensating balance petty cash vouchers for all expenses
dated prior to the closing of the books
10. Window Dressing on December 31, 2021 21,000
11. Lapping TOTAL 601,000
12. Check Kiting
13. NSF (Not Sufficient Fund)/ Drawn against What is the amount of cash to be reported on the December 31,
insufficient fund (DAUD)/Drawn against 2021, statement of financial position?
Uncleared Deposits (DAIF)
14. Cash Overage/(Cash Shortage)
15. Petty Cash Fund
16. Imprest Fund System
17. Fluctuating Fund System

PROBLEM III: At year-end, Abueva company reported cash and

cash equivalents following:

Cash on hand P900,000

Demand deposit 8,250,000
Certificate of deposit 3,000,000
● Travel advances of P175,000 for executive travel for the first
Post-dated customer check 600,000
Petty cash fund 120,000 quarter of next year (employee to reimburse through salary
Traveler's check 80,000 reduction). Not included for cash (
Manager's check 210,000 ● Currency and coins on hand amounted to P4,200. - included
Money order 100,000
for cash
What total amount shall be should be reported as cash at year- ● A bank overdraft of P23,000 has occurred at one of the
end?
banks the company uses to deposit its cash receipts. At the
present time, the company has no other deposits in this
PROBLEM IV: Tenorio Company reported the checkbook balance
on December 31, 2021 at P10,300,000 and held the following bank.
items on same date: ● A separate fund in the amount of P1,320,000 is restricted for
the retirement of long-term debt.
Check payable to Tenorio, dated January 5, 2022 in payment of a
sale made in December 27, 2021, not included in December 31 ● Petty cash fund, P3,400. Included
checkbook balance. P3,000,000
● Commercial savings account of P950,000 and a commercial
Check payable to Tenorio, deposited December 15 and included in checking account balance of 590,000 are held at Aces
December 31 checkbook balance, but returned by bank on Banking Corporation. Included
December 30 stamped "NSF". The check was redeposited on
January 2, 2022 and cleared on January 5, 2022. P1,300,000 ● An IOU from Ross Geller, a company officer, in the amount
of P5,000. - not included
Check drawn on Tenorio's account, payable to a vendor, dated
● The company has two certificates of deposit, each totaling
and recorded in Tenorio's books on December 31, 2021 but not
mailed until January 10, 2022. P600,000 P430,000. These certificates of deposit have a maturity of
120 days.- Disregard
Certificate of time deposit - 3 months. P600,000
● Locsin Company has received a check that is dated January
What amount should be reported as cash on December 31, 2021? 12, 2022 in the amount of P152,000. - Post dated

PROBLEM V: On December 31, 2021, the checking of financial Locsin Company's adjusted cash and cash equivalents balance on
statements of Edwards Company reveal the following: December 31, 2021 is:
Current account at ILY bank (P35,000)
Current account at ILLY bank 56,000
Treasury bills (acquired 3 months before maturity) 250,000
Treasury bills (maturity date is 12/31/22) 595,000
Payroll account 259,000
Foreign bank account-restricted (translated) 1,000,000
Postage stamps 640
Employees' checks marked "DAIF" 8,000
IOU from the vice-president 59,000
Credit memo from a supplier for a purchase return 54,000
Traveler's check 75,000
Money order 24,000
Company's check dated 12/30/21 but not
mailed at year-end 33,000
Petty cash fund (P2,500 in currency
and expense receipts for 4,500) 7,000
PROBLEM V: Edwards Company's adjusted cash and cash
equivalents balance at December 31, 2021 is:

PROBLEM VI: Locsin Company wants to determine the amount of

cash to be reported on its December 31, 2021 balance sheet. The COMPREHENSIVE PROBLEMS
following information is provided:
PROBLEM VII: On December 31, 2020, Pudge Company's cash and
cash equivalents account balance per ledger of P1,000,000
includes the following:
 Office supplies expense 320
Demand deposit P550,000 Transportation expense 440
Undeposited collection 75,000 Computer repairs 850
Time deposit - 30 days 125,000 ✓Advances to office staff 1460
NSF customer check 5,000 ✓3,270
30-day money market placement due 1/28/2021 75,000 ✓A check drawn by Ty Inc, payable to
60-day commercial papers due 2/4/2021 20,000 ✓ the petty cash custodian 4,100
Savings deposit in closed bank 12,500 Postage stamps 300
IOU from an employee 37,500 An employee's check, returned by bank,
Preferred redemption fund 100,000 ✓marked “NSF” 900
TOTAL 1,000,000 An envelope containing
currencies with a note "For Amando"* 2,190
Additional information: TOTAL P17,500 -
Petty cash fund
a) Included in the demand deposit of P550,000 was a
customer check amounting to P12,500 dated January 25, *Amando is a retiring employee
2021.
The general ledger shows an Imprest fund cash balance of
b) Also included in the demand deposit is a customer check P17,500.
amounting to P22,500 dated December 31, 2019. The
1. What is the petty cash shortage or overage? - 6,900
company neglected to encash the check. On December
- add the petty cash fund balance
31, 2020, the customer was informed and he was willing
-
to replace this with a new one. New check is yet to be
2. What is the adjusted balance of the petty cash fund on
received from the customer.
December 31, 2020?
c) Check of P15,000 dated January 31, 2021 in payment of
accounts payable was recorded and mailed December
31, 2020.

d) Check of P17,500 in payment of accounts payable was

recorded on December 31, 2020 but mailed to creditors
on January 15, 2021.

e) The company uses the calendar year. The cash receipt

journal was held open until January 15, 2021 during
which time P20,000 was collected and recorded on
December 31, 2020.

Requirements:
1. Prepare journal entry to correct the cash count.
2. Compute the cash and cash equivalents to be presented
on December 31, 2020 statement of financial position.

PROBLEM VIII: On December 31, 2021, the accountant for Ty Inc,

re-examined the petty cash fund. The petty cash presented the
following during the count:

✓ Currencies 2,350
✓ Petty cash vouchers:
Postage 200