Problem 1: Analysis of Accounts

The following information has been extracted from the accounting records of the SMART COMPANY at December 31, 2019 .

Cash on hand Php 40,800

Certificate of time deposits with maturity of 3 months 1,000,00
Customer's note receivable 40,000
Reconciled balance in ABC Bank checking account (14,000)
Reconciled balance in BCD bank checking account 374,000
Balance in DEF savings account 342,400
Customers postdated check 54,000
Employee Travel Advance 64,000
Cash in Bond Sinking Fund 48,000
Bond Sinking fund investment 323,600
Postage stamps 17,200

Required:
1. Total amount that should be reported as cash at December 31, 2019
2. Total amount of cash equivalents at December 31, 2019

Problem 2: Analysis of Accounts

The controller of LOVE CO. is trying to determine the amount of cash and cash equivalents to be reported on its December 31, 2019
statement of financial position. The following is provided:

a. Balances in the company's accounts at ABC Bank:

- Checking account Php 540,000
- Savings account Php 884,000
b. Undeposited customer's check Php 208,000
c. Currency and Coins on hand Php 23,200 /
d. Savings account at the BCD bank with a balance of Php 350,000. This account is being used to accumulate cash for future
plant expansion in 2020.
e. Php 800,000 balance in a checking account at the BCD Bank. In exchange for a line of credit, the company has agreed
to maintain a minimum balance of Php 100,000 in this account.
f. Treasury bills; 30-day maturity bills totaling Php 600,000 and 180-day bills totaling Php 880,000
g. LOVE Co, has purchased Php 1,000,000 of commercial paper of Mendez Corp. which is due in 60 days,
h. Money market placement with maturity of 3 months, Php 500,000

Required:
What amount should be reported as cash and cash equivalents on December 31, 2019?

Problem 3: Petty Cash Fund

On January 1, 2019, HAPPY CO. establishes a petty cash account and designates Masayahin Reyes as petty cash custodian. The
original amount included in the petty cash fund is Php 10,000. The following disbursements are made from the fund

Office Supplies Php 3,460

Postage 2,240
Entertainment 840

The balance in the petty cash box is Php 3,200

1. The person responsible, at all times, for the amount of the petty cash fund is the?
a. Chairman of the Board of Directors
b. Senior Management
c. Petty Cash Custodian
d. General Cashier

2. The objective of establishing a petty cash fund is to?

a. Cash checks for employees
b. Account for all cash receipts and disbursements
c. Account for cash sales
d. Facilitate payment of small, miscellaneous items

3. How much is the cash shortage?

Problem 4: Cash Count

A surprise count of the Isabela Company's Imprest petty cash fund, carried on its records at Php 50,000 was made on September
23, 2020.

The company acts as agent for an express company in the issuance and sale of money orders. Blank money orders are held by the
cashier for issuance upon payment of the designated amounts by employees. Settlement with the express company is made weekly
with its representative, who calls at the Isabela Co. office. At that time he collects for orders issued, accounts for unissued or ders,
and leaves additional blank money orders, serially numbered.

The count of the items presented by the cashier as composing the fund was as follows:

Currency (Bills and Coins)

Cashed Checks
Vouchers (made out in pencil and signed by recipients
NSF checks (dated Jun 10 and 15, 2020)
Copy of petty cash receipt vouchers:
Return of expense advance
Sale of Money orders (No. A11-20)
Blank Money Orders claimed to have been purchases for
Php 100 each from the express company (No. A21-29)
At the time of the count, there were also on hand the following
Unissued money orders, No. A30-40
Unclaimed wage envelopes (sealed and amounts not shown)

The following day the custodian of the fund produced vouchers aggregating Php 4,000 and explained that these vouchers had
been temporarily misplaced the previous day. They were for wage and advances to employees.

Required:
1. The composition of the fund at September 23, 2020
2. Cash Short or Over?
Problem 5: Cash Count
Babes is the cashier of the Cauayan Glass Company. As representative of SRM and Associates, CPAs, you were assigned to verify
her cash on hand in the morning of January 4, 2019. You began to count at 9:00am in the presence of Ms. Babes. In the course of
your counting you found currencies in paper bills and coins together with checks, vouchers and other items, which are mentioned
below:

Bills and Coins:

Php 50.00 2 loose

Php 20.00 9 loose
Php 10.00 13 loose
Php 5.00 5 loose
Php 1.00 74 loose
Php.25.00 5 rolls and 32 loose (50 pieces to a roll)
Php.10.00 10 rolls and 15 loose (50 pieces to a roll)
Php.05.00 16 rolls and 9 loose (40 pieces to a roll)

Checks:

Maker Date Payee Amount

Jose Cruz, Asst Manager 12/23/2018 Cauayan Glass Company Php 60.00
Babes, Cashier 12/26/2018 Cauayan Glass Company Php 40.00

IOUS
A David, Janitor 12/20/2018 Php 35.00
U. Agosto, Clerk 12/22/2018 Php 25.00
Pedro Penduko, Bookkeeper 12/24/2018 Php 15.00

Petty Cash Vouchers for replenishment

Payee Date Account Charged Amount
U. Agosto, Clerk 12/16/2018 Advances to Employees Php 10.00
Borja & Co. 12/17/2018 Supplies Php 14.50
Victory Liner 12/18/2018 Freight-In Php 18.25
Postal Office 12/18/2018 Supplies Php 30.00
B. Vallo, Carpenter 12/20/2018 Repairs and Maintenance Php 45.00
B. Tello, MMessenge 12/21/2018 Miscellaneous Expense Php 15.40

Your investigation also disclosed the following:

a. The balance of petty cash fund per books is Php 900.00
b. Cash sales of January 2, 2019 amounted to Php 965 per sales records, while Cash Receipts Book and Deposit slip showed
that only Php 765 was deposited in the bank on January 3, 2019.
c. The following employee’s pay envelopes had been opened and the money was removed. Each envelope wass marked
“unclaimed”
M. Malakas Php33.25
H. Maganda Php 24.75

Required:
1. Prepare working papers showing your cash count.
2. How much is the cash short or over?
3. Prepare necessary adjusting Journal Entries.

Problem 6: Bank Reconciliation – Adjusted Balance Method

The cash account of Dolly, Inc. disclosed a balance of Php 17,056.48 on October 31. The bank statement as of October 31 showed
a balance of Php 21,209.45. Upon comparing the statement with the cash records, the following facts were developed.
a. Dolly’s account was charged on October 26 for a customer’s uncollectible check amounting to Php 1,143
b. A 2 month 9% Php 3,000 customer’s note dated august 25 discounted on October 12, was dishonored October 26 and the
bank charged Dolly Php 3,050.83, which included a protest fee of Php 5.83
c. A customer’s check for Php 725 was entered as Php 625 by both the depositor and the bank but was later corrected by
the bank
d. Check no. 661 for Php 1,242.50 was entered in the cash disbursements journal at Php 1,224.50 and check по. 652 for Php
32.90 was entered as Php 329. The company uses the voucher system
e. Bank service charges of Php 39.43 for October were not yet recorded on the books
f. A bank memo stated that Dolly’s note for Php 2,500 and interest of Php 62.50 had been collected on October 29, and the
bank charged Php 12.50 (No entry was made on the books when the note was sent to the bank for collection)
g. Receipts of October 29 for Php 6,850 were deposited November 1

The following checks were outstanding on October 31:

No. 621……………… Php 1,250.00 No. 671…………….. Php 732.50
No. 621……………… 3,448.23 No. 673……….……. 187.90
No. 632……………… 2,405.25 No. 675…………….. 275.72
No. 670……………… 1,775.38 No. 676…………….

Required:

1. Adjusted cash balance as of October 31?

Problem 7: Bank Reconciliation- All Methods
Rose Company uses a calendar year accounting period. The following information is available about the company’s cash.

Rose Company
Bank Reconciliation

Balance per Bank Statement Php 4,942.00

Add: Deposit in Transit 610.00
Deduct: Outstanding checks
No. 606 Php 177
No. 607 248 425.00
Correct Cash Balance Php 5,127.00

Balance per books Php 5,139.00

Deduct: Bank Service Charge 12.00
Correct Cash Balance Php 5,127.00

National Security Bank

Rose Company

Date Debits Credits Balance

4/30 Php 4,942.00
5/01 Php 610.00 Php 5,552.00
5/02 Php 177.00 Php 5,375.00
5/04 Php 248.00 Php 1,552.00 Php 6,679.00
5/04 Php 755.00 Php 5,924.00
5/05 Php 437.00 Php 5,487.00
5/09 Php 489.00 Php 3,621.00 Php 8,619.00
5/12 Php 705.00 Php 1,986.00 Php 9,900.00
5/20 Php 930.00 Php 8,970.00
5/22 Php 423.00 Php 8,547.00
5/26 Php 2,549.00 Php 11,096.00
5/29 Php 255.00 NSF Php 10,841.00
5/30 Php 20.00 DM Php 10,821.00
5/30 Php 5,798.00 Php 5,023.00
5/31 Php 14.00 SC Php 1,290.00 CM Php 6,299.00

Rose Company’s Cash Account

Taken from General Ledger

Balance, April 30 Php 5,139.00

Cash Receipts Journal, May 31 Php 10,583.00
Cash Disbursement Journal, May 31 Php 10,816.00

Cash Receipts Journal Cash Payments Journal

Date Cash Debit Date Check No. Cash Credit
5/03 Php 1,552.00 5/01 608 Php 755.00
5/08 Php 3,621.00 5/03 609 Php 473.00
5/12 Php 1,986.00 5/06 610 Php 489.00
5/25 Php 2,549.00 5/11 611 Php 705.00
5/31 Php 875.00 5/16 612 Php 930.00
Php 10,583.00 5/21 613 Php 243.00
5/27 614 Php 511.00
5/29 615 Php 5,798.00
5/30 616 Php 346.00
5/31 617 Php 566.00
Php 10,816.00
Additional Information:

a. During May a collection charge of Php 20.00 that was applicable to Rose Company was erroneously deducted by the
bank from Rose Company’s account.
b. The credit memo shown on the bank statement relates to a note that the bank collected on Rose's behalf. The note had
a face value of Php 1,200 and rose earned interest of Php go during the current accounting period. The company has not
yet recorded the collection.
c. Rose failed to record the bank service charge for April.
d. The NSF check shown on the bank statement had been received during May from a customer on account. The return of
the check has not yet been recorded by Rose.
e. Rose made 2 errors in recording cash payments during May:
Check No. Actual Amount of Check Amount Recorded
609 Php 437.00 Php 473.00
613 Php 423.00 Php 243.00
Check no 609 was for delivery expense; check no 613 was issued to purchase equipment.

Required:
1. Prepare the bank reconciliation using the Adjusted Balance Method.
2. Prepare the bank reconciliation using the Bank to Book balance Method.
3. Prepare the bank reconciliation using the Book to Bank Balance Method.
4. Prepare the necessary journal entries
Problem 8: Proof of Cash – Adjusted Balance Method
The following information pertains to the cash of PBB Company

a. July 31 August 31
Balance shown on bank statement Php 2,738.00 Php 2,696.00
Balance shown in general ledger before reconciling
The bank account Php 2,578.00 Php 2,500.00
Outstanding checks Php 863.00 Php 1,015.00
Deposit in Transit Php 685.00 Php 1,245.00

b. For August
Deposits shown on bank statement Php 5,588.00
Charges shown on bank statement Php 5,630.00
Cash receipts shown on company’s books Php 5,398.00
Cash payments shown on company’s books Php 5,476.00

c. The bank service charge was Php 18.00 in July (recorded by the company in August) and Php 24.00 in August (not yet recorded
by the company)
d. Included with the August bank statement was a check for Php 500 that had been received on August 25 from a customer on
account. The returned check, marked NSF by the bank, has not yet been recorded on the company’s books.
e. During August the bank collected Php 750.00 of bond interest for PBB Company and credited the proceeds to the company’s
account. The company earned the interest during the current accounting period but has not yet recorded it.
f. During August the company issued a check for Php 696.00 for equipment. The check, which cleared the bank during August
was incorrectly recorded by the company for Php 896.00 payment.

Required:
1. Prepare for a proof of cash

Problem 9: Proof of Cash – Book to Bank and Bank to Book Balance Method
The auditor of HOLIDAY INN gathered the following information:
a. The November 30 bank statement balance included bank service charges of Php 2,000
b. The November 30 cash balance in the general ledger was Php 244,500
c. Outstanding checks on November 30 were Php 63,000 while undeposited receipts were Php 36,000
d. The bank service charges as shown in the bank statement totaled Php 3,000
e. The December 31 cash balance in the general ledger was Php 319,750 which recognized Php 482,750 for December receipts
and Php 405,500 for checks written during December. In transit to the banks were receipts of Php 28,750 in December. Checks
of Php 15,000and checks of Php 60,500 written in December had not yet cleared the bank.

Required:
a. Prepare the proof of cash using the Book to Bank balance method.
b. Prepare the proof of cash using the Bank to Book balance method.
c. What is the total book disbursements for December?
d. What is the November 30 bank balance?
e. What is the total bank receipts in December? 6. What is the total bank disbursements in December?
f. What is the bank balance on December 31?