Cash and Cash Equivalents

CASH AND CASH EQUIVALENTS CASH BALANCE Petty Cash Fund 1. Mr. Tomas Y. Lang, a businessman friend, has requested your help in explaining and solving the following problems that confront his company, the T.Y. Lang Corp. A cash count on January 2, 1976 showed the following items in the petty cash box: Currency and coins counted P 12.56 Envelope containing contributions to employees party 90.00 Petty cash vouchers approved 14.50 Employees’ IOUs 180.00 Company check for fund replenishment 92.00 The petty cash fund was established for an amount of P300.00. What is the correct amount of petty cash for the balance sheet as of the end of the year December 31, 1975? (E) A. P300 C. P104.56 B. P12.56 D. Some other answer. RPCPA 1076 1. Account of the petty cash fund of XYZ Company showed its composition as follows: Coins and currency 3,300 Paid vouchers: Transportation 600 Gasoline 400 Office supplies 500 Postage stamps 300 Due from employees 1,200 3,000 Manager’s check returned by the bank marked “NSF” 1,000 Check drawn by company to the order of petty cash custodian 2,700 What is the amount of the petty cash fund for balance sheet purposes? (E) A. 10,000 C. 6,000 B. 7,000 D. 9,000 RPCPA

60. An account of the petty cash fund showed its composition as follows: Coins and currency Paid vouchers Transportation 600 Gasoline 400 Office supplies 500 Postage stamps 300 Due from employees 1,200 Employee’s check returned by bank marked “DAIF” Check drawn by the company to the order of the petty cash custodian 4,000

What is the correct amount of petty cash fund? A. 6,000 C. 9,000 B. 7.000 D. 10,000

2,000

3,000 1,000

1. The ledger account for petty cash of MARTY Co. as of December 31, 1990 showed a balance of P3,000. However, the following items were found in the petty cash box: Currency and coins P1,019.20 Vale slips from employees 535.00 An envelope containing cash collections to be donated to earthquake victims by employees wit list of names attached 115.00 Petty cash vouchers paid: Telegram charges P 58.00 Office supplies 134.00 Transportation 124.50 Postage stamps 74.00 390.50 Check of an employee post-dated Jan. 5, 1991 200.00 Employee’s check marked NSF Jan. 5, 1991 350.00 Check drawn by MARTY Co. to petty cash 500.00 TOTAL P3,019.70 What is the correct amount of petty cash fund that should be shown on the balance sheet as of December 31, 1990? (E) A. P1,404.20 C. P1,634.20 B. P1,519.20 D. P1,524.50 RPCPA 1091

14. The petty cash fund of Becky Company on December 31, 2008 is composed of the following: Coins and currencies 16,000 Petty cash vouchers: Postage stamps 2,000 Supplies 3,000 Cash advances to employees 4,000 Employee’s check returned by bank marked NSF 5,000 Check drawn by the company payable to the order of Ms. Bobadilla, petty cash custodian, representing her salary 15,000 A sheet of paper with names of employees together with contribution for a birthday gift of a co-employee in the amount of 5,000 Total 50,000 The petty cash ledger account has an imprest balance of P50,000. What is the correct amount of petty cash on December 31, 2008? A. 16,000 C. 36,000 B. 31,000 D. 50,000 Siy Cash in Banks Composition 89. Kennison Company has cash in bank of $10,000, restricted cash in a separate account of $3,000, and a bank overdraft in an account at another bank of $1,000. Kennison should report cash of (E) a. $9,000. c. $12,000. b. $10,000. d. $13,000. KW&W 1e 91. Lawrence Company has cash in bank of $15,000, restricted cash in a separate account of $4,000, and a bank overdraft in an account at another bank of $2,000. Lawrence should report cash of (E) a. $13,000. c. $18,000. b. $15,000. d. $19,000. KW&W 1e Cutoffs 2. The Cash account of Island Corp. has a balance of P96,000 on December 31, 2012. Your review of the cash transactions recorded in December revealed the following: Cash receipts included customer’s checks for P4,000 dated January 10, 2013. Cash disbursements included:  Check of P10,000 payable to Ace Company. The check, dated December 23, was delivered to Ace on December 24, but had not been paid by the bank as of December 31.

 Check of P7,000 payable to King Co. The check was dated December 29 but still undelivered as of December 31. What is the correct cash balance at December 31, 2012? (E) A. P75,000 C. P97,000 B. P89,000 D. P99,000 R & E 2012

Cash on Hand & in Banks Cash on Hand & in Bank Cash on hand, cash in bank 3. Consider the following: Cash in Bank – checking account of $13,500, Cash on hand of $500, Post-dated checks received totaling $3,500, and Certificates of deposit totaling $124,000. How much should be reported as cash in the statement of financial position? (E) a. $ 13,500. c. $ 17,500. b. $ 14,000. d. $131,500. KW&W 1e

4. Diamond Company had the following account balances at December 31, 2012: Cash in banks P2,250,000 Cash on hand 125,000 Cash legally restricted for additions to plant (expected to be disbursed in 2013) 1,600,000 Cash in banks include P600,000 of compensating balances against short-term borrowing arrangements. The compensating balances are not legally restricted as to withdrawal by Diamond. In the current assets section of Diamond’s December 31, 2012 statement of financial position, total cash should be reported at (E) A. P1,775,000 C. P2,375,000 B. P2,250,000 D. P3,975,000 R & E 2012

Comprehensive 6. The following pertains to Megatron, Inc. on December 31 of the current year: Checking account balance P925,000; an overdraft in special checking account at same bank as normal checking account of P17,000; certificate of deposit P400,000; cash held in a bond sinking fund P200,000; postdated check from customer P11,000; certified check from customer P9,800; NSF check received from customer P15,000; cash advance to subsidiary of P300,000; postage stamps on hand P620; utility deposit paid to electric company P8,000; currency and coins in a petty cash fund (the company has not replenished the fund to the imprest amount of P5,000) P800. The correct amount that should be reported as cash is (M1) A. P908,800 C. P1,318,600 B. P918,600 D. P1,322,800 Cabarles

1. The balance sheet of Maligaya Co. as of December 31, 1981 showed the cash account of P87,300. It was found to have included the following items:  Postal money orders from customers P2,400  Notes receivable in the possession of a collecting agency, P3,200  Receipts for expenses advanced for the account of certain suppliers, P1,600  Customers’ post-dated checks, P1,500  Customers’ checks returned by the bank marked “No sufficient funds,” P1,800  Currencies and coins on hand, P600  Traveler’s check, P500  Checks in payment of accounts, ready for issuance and recorded on December 31, 1981 but still in the safe of the cashier awaiting instructions for delivery to payees, P6,000  Petty cash fund, (P160 in currency and expense receipts for P840), P1,000 The correct cash account balance for the balance sheet is (M) A. P82,500 D. P72,360 B. P76,500 E. P78,360 C. P81,660 RPCPA 0582 4. Mariela Company provided following information on December 31,2012: Cash in bank per book
 7,300,000 Cash in bank per bank statement 7,000,000 Deposit in transit 1,200,000 Outstanding checks (including certified check of P200,000) 1,500,000 Deposit in other bank closed by BSP
 1,500,000 Currency and coins on hand 600,000 Petty cash fund
 50,000 DAIF checks of customers returned by bank
 500,000 Error in recording a check in the book. The correct amount as paid by the bank is PI00,000 instead of P200,000 as recorded in the book 100,000 What is the total “cash” to be reported as current asset on December 31, 2012? A. 6,900,000 C. 7,300,000 B. 7,000,000 D. 7,550,000 CPAR 1012 5. The Ruby Company’s ledger showed a balance in its cash account at December 31, 2012 of P682,250, which was determined to consist of the following: Petty cash fund P 3,600 Checking account in Metrobank (check of P6,000 is still outstanding) 336,750 Notes receivable in the possession of a collecting agency 25,000 Undeposited receipts, including a postdated check for P10,500 and

Traveler’s check for P10,000 178,000 Bond sinking fund – cash 127,500 IOUs signed by employees 4,950 Paid vouchers, not yet recorded 6,450 Total P682,250 At what amount should “Cash on hand and in bank” be reported on Ruby Company’s statement of financial position? (M) A. P501,850 C. P629,350 B. P507,850 D. P662,250 R & E 2012

3. Integrity Company had the following account balances at December 31, 2009: Cash in bank 5,000,000 Cash on hand 200,000 Time deposits 500,000 Cash as bond sinking fund due June 30, 2010 1,000,000 Cash legally restricted for additions to plant (expected to be disbursed in 2010) 2,000,000 Cash as preferred stock redemption fund (redemption date October 31, 2010) 2,500,000 Cash in bank includes P1,000,000 of compensating balance against short-term borrowing arrangement. The compensating balance is not legally restricted as to withdrawal by Integrity. In the current assets section of the December 31, 2009 balance sheet, total cash should be reported at A. 6,200,000 C. 8,700,000 B. 6,700,000 D. 11,200,000 Siy

Cash equivalent 17. SURE I’LL PASS CORPORATION held the following investments at year-end and you are to compute the cash and cash equivalents:  2,000 shares of Holdings, common stock purchased at P45 per share with a current market value of P49.50 per share.  P10,000 worth of commercial paper from BA Finance paying an interest rate of 8%. The commercial paper matures in 45 days.  P50,000 in Treasury bills due in 3 months.  50,000 shares of Republic Pair Common Stock purchased about a year-and-a-half ago at P33.75 per share. Year-end market value is P31,25 per share.  10,000 shares of TAIPAN, a small corporation owned by the brother of the president of SURE I’LL PASS. The shares were purchased several years back at P10. Current value can not be determined. (E)

A. None. B. P150,000

C. P60,000 D. P50,000 RPCPA 0595

Cash in bank & cash equivalent 6. Logistics Company had the following items listed in its trial balance at 12/31/11: Balance in checking account, Bank of the East $442,000 Treasury bills purchased on 11/1/11, mature of 1/30/12 20,000 Loan payable, long-term, Bank of the East 300,000 Included in the checking account balance is $50,000 of restricted cash that Bank of the East requires as a compensating balance for the $300,000 note. What amount will Logistics include in its year-end balance sheet as cash and cash equivalents? (D) A. $412,000. C. $392,000. B. $462,000. D. $442,000. S&S 6e 7. Cook Co. had the following balances at December 31, 1992: Cash in checking account $350,000 Cash in money-market account 250,000 U.S. Treasury bill, purchased 12/1/92, maturing 2/28/93 800,000 U.S. Treasury bill, purchased 3/1/92, maturing 2/28/93 500,000 Cook’s policy is to treat as cash equivalent all highly-liquid investments with a maturity of three months or less when purchased. What amount should Cook report as cash and cash equivalents in its December 31, 1992, balance sheet? (E) A. $600,000 C. $1,400,000 B. $1,150,000 D. $1,900,000 AICPA 0593 8. Pygmalion Company had the following account balances on December 31, 2004: Cash in bank – current account 5,000,000 Cash in bank – payroll account 1,000,000 Cash on hand 500,000 Cash in bank – restricted account for building construction expected to be disbursed in 2005 3,000,000 Treasury bills, purchased December 15, 2004 and due March 15, 2005 2,000,000 The cash on hand includes a P200,000 check payable to Pygmalion, dated January 15, 2005. What should be reported as “cash and cash equivalents” on December 31, 204? (M) A. 6,300,000 C. 6,500,000 B. 8,300,000 D. 8,700,000 Valix 2. Ralf Corporation had the following account balances at December 31, 2011:

Cash on hand and in bank P2,500,000 Cash restricted for bonds payable due on June 30, 2012 1,000,000 Time deposit 3,000,000 Savings deposit set aside for dividends payable on June 30, 2012 500,000 The total amount to be reported as cash and cash equivalents as of December 31, 2011 is A. P5,500,000 C. P6,500,000 B. P6,000,000 D. P7,000,000 Cabarles

7. Ira Company had the following cash balances on December 31, 2004: Petty cash fund -reimbursed on December 31, 2004 50,000 Cash on hand - undeposited coins and currencies 1,500,000 Cash in bank - unrestricted demand deposit account 4,000,000 Cash in bank - time deposit due January 15, 2005 2,000,000 Cash in bank - money market placement 1,000,000 The company had drawn and recorded checks amounting to P500,000 on December 15, 2004 in payment of accounts payable but the checks are not scheduled to be mailed until January 15, 2005. In exchange for a guaranteed line of credit, Ira has agreed to maintain a minimum balance of P300,000 in its unrestricted demand deposit account. How much should Ira report as cash and cash equivalents on December 31, 2004? (M) A. 7,050,000 C. 9,050,000 B. 6,750,000 D. 8,050,000 CPAR

9. The December 31, 2004 trial balance of Yasmin Company includes the following accounts: Petty cash fund 50,000 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  The petty cash fund includes unreplenished December 2004 petty cash expense vouchers for P15,000 and an employee check for P5,000 dated January 31, 2005.  A check for P100,000 was drawn against First Bank current account dated and recorded December 29, 2004 but delivered to payee on January 15, 2005.  The Fourth Bank time deposit is set aside for land acquisition in early January 15, 2005. The December 31, 2004 balance sheet should report “cash and cash equivalents” at (E) A. 5,130,000 C. 4,130,000 B. 5,150,000 D. 4,880,000 Valix

10. Cashmere Soap Corporation had the following items listed in its trial balance at 12/31/11: Currency & coins $ 650 Balance in checking account 2,600 Customer checks waiting to be deposited 1,200 Treasury bills, purchased on 11/1/11, mature on 4/30/12 3,000 Marketable equity securities 10,200 Commercial paper, purchased on 11/1/11, mature on 1/30/12 5,000 What amount will Cashmere Soap include in its year-end balance sheet as cash and cash equivalents? (D) A. $9,450. C. $7,450. B. $12,450. D. $19,650. S&S 6e 3. Baguio Company had the following account balances on December 31, 2003. Petty cash fund 50,000 Cash in bank – current account 6,000,000 Cash in bank – payroll account 1,500,000 Cash on hand 600,000 Cash in bank – restricted account for plant additions, expected to be disbursed in 2004 2,000,000 Treasury bills, due February 15, 2004 1,000,000 The petty cash fund includes, unreplenished December 2003 petty cash expense vouchers of P20,000 and employee IOUs of P10,000. The cash on hand includes a P100,000 check payable to Baguio dated January 15, 2004. What should be reported as “cash and cash equivalents” on December 31, 2003? (M) A. 9,050,000 C. 8,020,000 B. 9,020,000 D. 9,520,000 CPAR 4121 11. The following are held by Smite Co.: Cash in checking account $20,000 Cash in bond sinking fund account 30,000 Postdated check from customer dated one month from balance sheet date 250 Petty cash 200 Commercial paper (matures in two months) 7,000 Certificate of deposit (matures in six months 5,000 What amount should be reported as cash and cash equivalents on Smite’s balance sheet? A: $57,200 C: $27,450 B: $32,200 D: $27,200 AICPA R05

C. Garfinkle

12. Smartchip Corp. has supplied the following list of its bank accounts and cash as of its fiscal year-end June 30: Checking account (compensating balance of $12,000 with no restriction) $ 32,000 Savings account, 5.25% 20,000 Certificate of deposit, 6 months, 10% 50,000 Money market (30-day certificate), current rate, 9.25% 25,000 Payroll checking account 2,000 Certificate of deposit, 2 years, 12 % 50,000 Petty cash 1,000 $180,000

The amount reported as “cash” account as of June 30 should be (E) A. $55,000 C. $105,000 B. $180,000 D. $75,000

13. The December 31, 2004 trial balance of Frances Mae Company includes the following accounts: Cash in hand 500,000 Petty cash fund 20,000 Security Bank current account 1,000,000 PNB Current account No.1 400,000 PNB Current account No.2 (50,000) BSP treasury bill - 60 days 3,000,000 BPI time deposit - 30 days 2,000,000 Two months treasury bonds 500,000  The cash on hand includes a customer post dated check P100,000 and a postal money order of P40,000.  The petty cash fund includes unreplenished petty cash vouchers for P2,000 and an employee check for P3,000 dated January 31, 2005.  A check for P200,000 was drawn against Security Bank account, dated January 15, 2005, delivered to the payee and recorded at December 31, 2004.  The BPI time deposit is set aside for acquisition of land to be used as a factory sire. Total cash and cash equivalents on the balance sheet as of December 31, 2004 should be (M) A. 4,965,000 C. 6,965,000 B. 3,465,000 D. 4,775,000 CPAR

Service Change, Interest, Outstanding Checks 2. How much is the cash balance before adjustments of M&M Co. as of April 30, 1993 if given data as follows: Balance per statement sent by the bank as of April 30 – P2,100; bank service charge for April (not previously recorded in the books of M&M) – P10; outstanding checks – P200; interest on bank balance credited by the bank during April (not previously recorded on M&M’s books) – P30; deposit in transit – P400. (E) A. P2,300 C. P2,280 B. P2,480 D. P2,500 RPCPA 0593

BANK RECONCILIATION Cash balance per books NSF, Deposit in Transit, Outstanding Checks 47. The August 31 bank statement of Kelvin Inc. showed a balance of $113,000. Deducted in arriving at this amount was a customer's NSF check for $2,400 that had been returned. Kelvin had received no prior notice concerning this check. In addition to the bank statement, other records showed there were deposits in transit totaling $17,200 and that outstanding checks totaled $10,800. What is the cash balance per books at August 31 (prior to adjustments)? (E) A. $121,800 C. $117,000 B. $119,400 D. $115,400 S, S & S

Balance per bank statement P11,164 Receipts recorded but not yet deposited in the bank 1,340 Bank charges not recorded 16 Note collected by bank and not recorded on books 1,120 Outstanding checks 1,100 NSF checks - not recorded on books nor redeposited 160 Assuming no errors were made, compute the cash balance per books on June 30 before any reconciliation adjustments. A. P10,220 C. P11,404 B. P10,460 D. P12,348 Cabarles

Bank Credits, Bank Charges, Deposit in Transit, Outstanding Checks, Certified Check, Book Error 14. The following information pertains to Bindi Company as of December 31, 2009: Cash balance per bank statement 4,000,000 Checks outstanding (including certified check of P100,000) 500,000 Bank service charge shown in December bank statement 20,000 Error made by Bindi in recording a check that cleared the bank in December (check was drawn in December for P100,000 but recorded at P10,000) 90,000 Deposit in transit 1,300,000 What is the cash balance per ledger on December 31, 2009? A. 4,830,000 C. 4,910,000 B. 4,900,000 D. 5,010,000 Siy

Bank Credits, Bank Charges, Deposit in Transit, Outstanding Checks, Book Error 1. Stellar Company’s bank statement for the month of December included the following information: Ending balance, December 31 2,800,000 Bank service charge for December 12,000 Interest by bank to Stellar for December 10,000 In comparing the bank statement to its own cash records, Stellar found the following: Deposits made but not yet recorded by the bank 350,000 Checks written and mailed but not yet recorded by the bank 650,000 In addition, Stellar discovered that it had drawn and erroneously recorded a check for P46,000 that should have been recorded for P64,000. What is Stellar’s cash balance per ledger on December 31? (E) A. 2,500,000 C. 2,540,000 B. 2,520,000 D. 2,800,000 Siy

Bank Credits, Bank Charges, Outstanding Checks 14. Sandy, Inc. had the following bank reconciliation at March 31, 2012: Balance per bank statement, 3/31/12 P37,200 Add: Deposit in transit 10,300 47,500 Less: Outstanding checks 12,600 Balance per books, 3/31/12 P34,900 Data per bank for the month of April 2012 follow: Deposits P42,700 Disbursements 49,700 All reconciling items at March 31, 2012 cleared the bank in April. Outstanding checks at April 30, 2012 totaled P5,000. There were no deposits in transit at April 30, 2012. What is the cash balance per books at April 30, 2012? (E) A. P25,200 C. P30,200 B. P27,900 D. P35,500 Cabarles Bank debits & credits, NSF checks 2. The information below is from the books of the Seminole Corporation on June 30:

Bank Credits, Bank Charges, NSF Checks, Deposit in Transit, Outstanding Checks, Certified Check 15. In your audit of Bora Company as of December 31, 2009, you gathered the following information: Balance per bank statement 6,000,000 Deposit in transit 3,000,000 Outstanding checks 1,200,000 Customer’s note collected by bank 750,000 Customer’s NSF check 147,000 Checkbook printing charge 3,000 Certified checks included in the outstanding checks 400,000 Depositor’s note charged to account 500,000 The cash balance per book of Bora Company on December 31, 2009 is (M) A. 7,100,000 C. 8,100,000 B. 7,600,000 D. 8,200,000 Siy

$46,700

$37,200 10,300 47,500 12,600 $34,900

Bank Credits, Bank Charges, NSF Checks, Deposit in Transit, Outstanding Checks, Bank Error 2. The bank statement of S-mart, Inc. for April 1982 showed an ending balance of P169,263. Deposit in transit on April 30 was P18,200. Outstanding checks as of April 30, were P59,435, including a P5,000 check which the bank had certified on April 27. During the month of April, the bank charged back NSF checks in the amount of P3,435 of which P1,835 had been redeposited by April 20. On April 23, the bank charged S-Mart’s account for a P2,200 items which should have been charged against K-mart, Inc., the error was not detected by the bank. During April, the proceeds from notes collected by the bank for S-Mart, Inc. was P7,548 and bank charges for this services was P18. How much is the unadjusted book balance on April 30? (M) A. P129,298 C. P129,533 B. P141,158 D. PP140,923 RPCPA Adapted Beginning bank balance, deposits, disbursements, outstanding checks 16. Tresh, Inc. had the following bank reconciliation at March 31, 2010: Balance per bank statement, 3/31/10 Add: Deposit in transit Less: Outstanding checks Balance per books, 3/31/10 Data per bank for the month of April 2010 follow: Deposits

Disbursements 49,700 All reconciling items at March 31, 2010 cleared the bank in April. Outstanding checks at April 30, 2010 totaled $6,000. There were no deposits in transit at April 30, 2010. What is the cash balance per books at April 30, 2010? a. $28,200 c. $34,200 b. $31,900 d. $38,500 AICPA Adapted

Cash Balance per Bank Statement Bank debits, Deposit in transit, outstanding checks, bank error 3. The cash in bank account of S-mart, Inc. for April showed an ending balance of P129,298. Deposits in transit on April 30 was P18,200. Outstanding checks as of April 30, were P59,435, including a P5,000 check which the bank had certified on April 27. During the month of April, the bank charged back NSF checks in the amount of P3,435 of which P1,835 had been redeposited by April 20. On April 23, the bank charged S-Mart’s account for a P2,200 items which should have been charged against K-mart, Inc., the error was not detected by the bank. During April, the proceeds from notes collected by the bank for S-Mart, Inc. was P7,548 and bank charges for this services was P18. How much is the unadjusted balance per bank on April 30? A. P88,333 C. P169,263 B. P95,263 D. P173,663 Cabarles

P78,450 6,200

Bank Charges, Co. Error, Deposit in Transit, Outstanding Checks 5. The following information pertains to Benguet Company as of December 31, 2003: Cash balance per general ledger 6,500,000 Cash balance per bank statement ? Checks outstanding (including certified check of P100,000) 500,000 Bank service charge shown in December bank statement 20,000 Error made by Benguet in recording a check that cleared the bank in December (check was drawn in December for P345,000 but recorded at P395,000) 50,000 Deposit in transit 930,000 At December 31, 2003 cash balance per bank statement is (M) A. 6,530,000 C. 6,100,000 B. 6,000,000 D. 5,900,000 CPAR 4121

Bank Credits, NSF Check, Deposit in Transit, 16. These are data for the month of December 1990: Balance per books, December 31, 1990 Outstanding checks, December 31, 1990

Cash receipts recorded in books but not yet deposited 14,150 No sufficient fund check 3,500 Note collected by bank, net of P400 service charges not recorded in books 12,600 Following the “book to bank” procedure approach of reconciliation and based on the above data, what is the balance per bank statement on December 31, 1990? (M) A. P79,200 C. P78,800 B. P79,600 D. P52,200 RPCPA 0591 Bank Credits & Charges, Interest, NSF Checks, Deposit in Transit & Outstanding Checks, Bank Error 17. On March 3, 2004, Able Company received its bank statement. However, the closing balance of the account was unreadable. Attempts to contact the bank after hours did not secure the desired information. Thus, you had to prepare a bank reconciliation from the available information summarized below: February 28 book balance 1,460,000 Note collected by bank 100,000 Interest earned on note 10,000 NSF check of customer 130,000 Bank service charge on NSF check 2,000 Other bank service charges 3,000 Outstanding checks 202,000 Deposit of February 28 placed in night depository 85,000 Check issued by Axle Company charged to Able’s account 20,000 What was the cash balance per bank statement? (M) A. 1,435,000 C. 1,338,000 B. 1,532,000 D. 1,557,000 CGAC Constructive Accounting 3. Compute for the bank statement balance using the data below. The cashier misplaced all the bank statements for the past year. You reviewed the accounting records and discovered that the following journal entry was made to reconcile the June 30, 1994 bank records and accounting records. Accounts receivable 7,601.20 Miscellaneous expense 62.50 Notes receivable 1,000.00 Interest revenue 50.00 Cash 6,613.70 Preadjustment cash balance in the accounting records was P37,102.35, outstanding checks were P1,037.50 and no other adjustments were required. (M)

A. P31,526.15 B. P37,102.35

C. P38,152.35 D. P30,488.65

RPCPA 1094

18. The cashier misplaced all the bank statements for the past year. You reviewed the accounting records and discovered that the following journal entry was made to reconcile the June 30, 2012 bank records and accounting records: Accounts receivable 152,024 Miscellaneous expense 1,250 Notes receivable 20,000 Interest revenue 1,000 Cash 132,274 Pre-adjusting cash balance in the accounting records was P768,370, outstanding checks were P20,750 and no other adjustments were required. What is the bank statement balance at June 30, 2012? (E) A. P615,346. C. P656,846. B. P636,096. D. P768,370 R & E 2012

Adjusted Cash in Bank Balance Book & Bank to adjusted 19. Smith Co. has a checking account at Small Bank and an interest-bearing savings account at Big Bank. On December 31, year 1, the bank reconciliations for Smith are as follows: Big Bank Small Bank Bank balance $150,000 $1,500 Deposit in transit 5,000 Outstanding checks (8,500) Book balance 155,000 (7,000) What amount should be classified as cash on Smith's balance sheet at December 31, year 1? a. $148,000 c. $155,000 b. $151,000 d. $156,000 AICPA R08

20. Hazelton Manufacturing prepares a bank reconciliation at the end of every month. At the end of May, the general ledger checking account showed a balance of $1,360 and the bank statement showed a bank balance of $1,445. Outstanding checks totaled $350 and deposits in transit were $150. The bank statement listed service charges of $30 and NSF checks totaling $85. The corrected cash balance is: (D) A. $1,130. C. $1,245. B. $1,160. D. $1,445. S&S 6e

21. Brockton Carpet Cleaning prepares a bank reconciliation at the end of every month. At the end of July, the balance in the general ledger checking account was $2,750 and the bank balance on the bank statement was $2,980. Outstanding checks totaled $680 and deposits in transited were $400. The bank statement revealed that a check written for $120 was incorrectly recorded by Brockton as a $220 disbursement. The bank statement listed service charges and NSF check charges totaling $150. The corrected cash balance is: (D) A. $2,270. C. $2,470. B. $2,550. D. $2,700. S&S 6e 21. While checking the cash accounts of Bauer Company on December 31, 2009, you find the following information: Balance per book 6,500,000 Balance in checking account (outstanding checks per book of P1,660,000) 7,000,000 Deposit in bank closed by BSP 1,500,000 Deposit in transit 1,200,000 Currency and coins on hand 400,000 Petty cash fund (of which P10,000 is in form of paid vouchers) 50,000 Bank charges not yet taken up in book 10,000 Bond sinking fund cash 1,000,000 Receivables from employees 100,000 Error in recording a check in the book. The correct amount as paid by the bank is P100,000 instead of P150,000 as recorded in the book or a difference of 50,000 The correct cash in bank balance for Bauer on December 31, 2009 is A. 6,540,000 C. 6,980,000 B. 6,640,000 D. 8,040,000 Siy 1. The following data pertaining to the cash transactions and bank account of Mandirigma Company for the month of May are available to you: Cash balance, per records, May 31 P17,194 Cash balance, per bank statement, 5/31 31,948 Bank service charge for May 109 Debit memo for the cost of printed checks delivered by the bank 125 Outstanding checks, May 31 6,728 Deposit of May 30 not recorded by bank until June 1 4,880 Proceeds of a bank loan of May 30, net of interest of P300 5,700 Proceeds from a customer's promissory note, including interest of P100 8,100 Check No. 2772 issued to a supplier entered in the accounting records at P2,100 but deducted in the bank statement at an erroneous amount of 1,200

Stolen check lacking an authorized signature, deducted from Mandirigma's account by the bank in error Customer's check returned by the bank marked NSF; no entry has been made in the accounting records to record the returned check What is the correct cash balance at May 31? A. P29,200 C. P30,300 B. P30,000 D. P30,900

800

760

Cabarles

13. Rudi Company keeps all its cash in a checking account. An examination of the company’s accounting records and bank statement for the month ended June 30, 2012 revealed the following information: The cash balance per book on June 30 is P12,000,000 A deposit of P2,000,000 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 Rudi and credited the proceeds of P1,400,000 to the company’s account Checks outstanding on June 30 amount to P500,000 Rudi discovered that a check written in June for P200,000 in payment of an account payable, had been recorded in the company’s records as P300,000 Included with the June bank statement was NSF check for P400,000 that Rudi had received from a customer on June 26 The bank statement shows a P50,000 service charge for June The cash in bank to be shown on the balance sheet on June 30, 2012 is (E) A. P11,500,000 C. P13,050,000 B. P12,850,000 D. P13,500,000 Cabarles

Bank & Book to Adjusted 6. The ledger account of Bally Company showed a ledger balance of P1,800,000 on December 31, 2008. The bank statement as of that date showed a balance of P2,100,000. Upon comparing the statement with the cash records, the following facts were determined:  There were bank service charges for December of P10,000.  A bank memo stated that Alex Inc.’s note for P200,000 and interest of P20,000 had been collected on December 29, and the bank has made a charge of P5,000 on the collection. No entry had been made in Bally’s books when Alex’ note was sent to the bank for collection. Receipts for December 31 for P550,000 were not deposited until January 2. Checks outstanding on December 31 totaled P325,000. The bank had charged the Bally’s Company’s account for a customer’s uncollectible check amounting to P43,000 on December 29.   

 A customer’s check for P900,000 had been entered as P600,000 in the cash receipts journal by Bally on December 15.  Check no. 777 in the amount of P141,000 had been entered in the cash book as P114,000, and check no. 799 in the amount of P10,000 had been entered as P100,000. Both checks had been issued to pay for purchases of equipment. What is the amount of cash to be shown in the December 31, 2008 balance sheet? A. 1,875,000 C. 2,226,000 B. 2,195,000 D. 2,325,000 Siy 6. The bookkeeper of Ifugao Company recently prepared the following bank reconciliation on December 31, 2003: Balance per bank statement 5,500,000 Add: Deposit in transit 200,000 Checkbook printing charge 5,000 Error made in recording check No. 2501 (issued in December) 100,000 Customer check marked DAIF 45,000 350,000 Total 5,850,000 Deduct: Outstanding checks 300,000 Note collected by bank (includes P25,000 interest) 250,000 550,000 Balance per book 5,300,000 Ifugao has P500,000 cash on hand on December 31, 2003. The amount to be reported as cash on the balance sheet as of December 31, 2003 should be (M) A. 5,400,000 C. 4,900,000 B. 5,900,000 D. 5,800,000 CPAR 4121

1,600 5,000

P8,700 210 15,510 P141,930

P126,420

25. The bookkeeper of Santa Clara Co. recently prepared the following bank reconciliation: Santa Clara Co. Bank Reconciliation December 31, 1998 Balance per bank statement Add: Deposit in transit Checkbook printing charge Error made in recording check No. 25 (issued in December) NSF check

Deduct: Outstanding checks P4,480 Note collected by bank (includes P50 interest 9,500 13,980 Balance per books P127,950 Santa Clara has P9,100 cash on hand on December 31, 1998. The amount Santa Clara should report as cash on the balance sheet as of December 31, 1998 should be (D) A. P120,260 C. P130,640 B. P139,740 D. P132,240 RPCPA 0598

22. Divine Grace Company keeps all its cash in a checking account. An examination of the company's records for the month ended December 31, 2004 revealed a bank statement balance of P45,000,000 and a book balance of P50,000,000. A deposit of P12,000,000 placed in the bank's might depository on December 29, 2004 does not appear on the bank statement. Checks outstanding on December 31, 2004 amount to P3,000,000. The bank statement shows that on December 15. 2004, the bank collected a note for Divine Grace and credited the proceeds of P5,500,000 to the company’s account. The proceeds included an interest of P500,000, all of which Divine Grace earned during 2004. Divine Grace Company discovered that a check written on December 20, 2004 for P900,000 in payment of an account had been recorded by Divine Grace as P600,000 Inducted with the December 31, 2004 bank statement was an NSF check of P1,000,000. The bank statement also shows a P200,000 service charge. The cash in bank on December 31, 2004 balance sheet should be (M) A. 54,000,000 C. 54,300,000 B. 53,500,000 D. 50,000,000 CPAR A. 4,500,000 C. 5,400,000 B. 5,350,000 D. 5,550,000

7. What is the amount of cash receipt per ledger for July? 
 A. 8,400,000 C. 9,400,000 B. 9,000,000 D. 9,600,000

8. What is the amount of cash disbursements per ledger for July? A. 6,550,000 C. 6,850,000 B. 6,700,000 D. 7,000,000