Cash on hand P 80,000

Checking account No. 143 - BPI 200,000

Checking account No. 155 - BPI (30,000)
*Securities classified as cash equivalents 3,600,000
Cash and Cash Equivalents, December 31, 2018 3,850,000
PROBLEM 8-4 CASH AND CASH EQUIVALENTS
1. The correct cash and cash equivalent balance on December 31, 2018 is:
a. 3,850,000 c. 5,250,000
b. 3,880,000 d. 5,280,000

Securities: Date Acquired Maturity Date Amount

120-day Certificate of Deposit 12/10/2018 01/31/2019 P 600,000
BSP-Treasury Bills (No.2) 10/31/2018 01/20/2019 1,000,000
Money Market Funds 11/21/2018 02/10/2019 2,000,000

PROBLEM 8-6 Cash and Cash Equivalents

Petty cash fund (70,000-15,000-5,000) P 50,000
Current account – Metro Bank (4,000,000+100,000) 4,100,000
Cash and cash equivalents P 4,150,000

PROBLEM 8-8 PETTY CASH FUND

Requirement 1
ABC COMPANY
Petty Cash Count Sheet
January 3, 2019; 9:00 AM

DENOMINATION QUANTITY TOTAL

Bills: P 200 10 P 2,000
100 20 2,000
20 40 800
Coins: 10 100 1,000
5 450 2,250
1 804 804
0.25 1,410 352.50
0.10 1,520 152
0.05 810 40.50
Total Bills and Coins P 9,399

Checks for Deposits:

Maker Date Payee Amount
Jose Manalo, Manager 12/05/18 ABC Company P 800
W. Ally, Petty Cash Custodian 12/28/18 ABC Company 500
I.O.U's Date Amount
A. Braham, janitor 12/19/18 P 250
R.Tica, clerk 12/20/18 150
P. Du, Bookkeeper 12/22/18 200
Total P 600

Vouchers:
Payee Date Account charged Amount
J. Cruz, messenger 12/14/18 Advances to employees P 125
Cid Bookstore 12/15/18 Supplies 150
Dalin Liner 12/19/18 Freight-out 192
Bureau of Posts(stamps) 12/20/18 Supplies 300
A. Bala, carpenter 12/21/18 Repairs 450
B. Go 01/02/19 Miscellaneous Expense 154
Total 1,371

Petty Cash Accounted:

Bills and coins P 9,399
Checks for deposit 800
I.O.U’s 600
Vouchers paid 1,371 12,170
Less: Petty cash Accountabilities:
Petty Cash Book Balance 12,000
Unclaimed Salary (400+200) 600
Cash Sales (8,000-6800) 1,200 13,800
Petty Cash Shortage (1,630)

Acknowledgment
I hereby acknowledge that the above petty cash fund items were counted in my
presence and the same were returned to me intact. I further acknowledge a petty cash
short of one thousand six hundred thirty pesos (1,630). I have no other fund
accountabilities.

W. Ally
Petty Cash Custodian

Requirement 2.

ADJUSTING ENTRIES Debit Credit

Advances to employees 125
Supplies 150
Freight-out 192
Supplies 300
Repairs 450
Miscellaneous Expense 154
Petty Cash Fund 1,371

Employee advances 500

Petty cash fund 500
Unused Postage 50
Postage Expense 50

Receivable from Custodian 1,630

Petty cash fund 1,630

Requirement 3

Bills and coins 9,399

Checks for deposit 500
Payments of Miscellaneous Expense after reporting date 154
Less:
Unclaimed Salary 600
Cash sales 1,200
Adjusted Total Petty Cash Fund 8,253

PROBLEM 8-10 Bank Reconciliation

Oct. 31 Receipts Disbursements Nov. 30
Unadjusted bank balance 18,005 17,709 25,620 10,094
Erroneous bank credit (500) (500)
Deposit in Transit:
October 1,790 (1,790)
November 3,600 3,600
Outstanding Checks:
October (6,681) (6,681)
Nov. (760+1,868) 2,628 (2,628)
13,114 19,019 21,567 10,566
Unadjusted book balance 11,534 18,269 21,575 8,228
Credit memo:
Oct. 1,600 1,600
Nov. 750 750
NSF: Nov 665 (665)
BSC: Oct (20) (20)
Nov 22 (22)
35 (35)
Check No. 148 overstated
Disbursement (1,000) 1,000
Check No. 150 understated
Disbursement 270 (270)
13,114 19,019 21,567 10,566
PROBLEM 8-12 Deposit in Transit

Deposit in transit, beg P 50,000

Add: Book debits for the month P 400,000
Less: CM recorded this month 5,000
Error – Prior 36,000
Error – Prior 27,000
Add: Error – Present 16,000 348,000
Total 398,000
Less: Bank debits for this month P 360,000
Less: CM for this month 6,000
Erroneous bank credit –Prior 2,500
Erroneous bank charge Prior 1,000 350,500
Deposit in Transit, end P47,500

PROBLEM 8-13 Outstanding Checks

Outstanding checks, beg (squeeze) P 12,880

Add: Book credits for the month P 85,800
Less: Error in recording 1,800
Service charge recorded 30 83,970
Total 96,850
Less: Bank debits for this month P 97,650
Less: NSF check returned 2,300
DM for this month 3,000 92,350
Outstanding checks, end P 4,500
PROBLEM 8-16 Proof of Cash

BANK 31-May Receipts Disbursement 30-June

Unadjusted bal-bank 1,250,000 1,400,000 1,300,000 1,350,000
Deposit in transit
-May 31 200,000 (200,000)
-June 30 153,000 153,000
Outstanding checks
-May 31 (150,000) (150,000)
-June 30 390,000 (390,000)
Erroneous bank credit
-May31 (45,000) (45,000)
-June 30 (17,000) (17,000)
Erroneous bank charge
-May 31 20,000 (20,000)
-June 30 (30,000) 30,000
Adjusted balances 1,275,000 1,316,000 1,465,000 1,126,000

BOOK 31-May Receipts Disbursement 30-June

Unadjusted bal-book 1,251,000 1,300,000 1,500,000 1,051,000
NSF
-May 31 (110,000) (110,000)
-June 30 75,000 (75,000)
CM for collection
-May 31 125,000 (125,000)
-June 30 150,000 150,000
Under of CR
-May 9,000 (9,000)
Adjusted balances 1,275,000 1,316,000 1,465,000 1,126,000

Question No. 2
Outstanding checks, beg. 150,000
Add Checks issued
Book disbursement 1,500,000*
Less DM last month 110,000
Error last mo.
Under of CD-
Over of CR - 1,390,000
Total 1,540,000
Less checks issued
Bank disbursement 1,300,000
Less DM this month 75,000
Erroneous credit
prior 45,000
Erroneous charged
Present 30,000 1,150,000
Outstanding checks, end 390,000

*1,251,000+1,300,000-1,051,000

Deposits in transit, beg 200,000

Add deposits made
Book receipts 1,300,000**
Less: CM PRIOR 125,000
Error prior
Under of CR (21K-12K) 9,000
Over of CD 1,166,000
Total 1,366,000
Less: Deposits acknowledged by the bank
Bank receipts 1400000*
Less: CM this month 150,000
Error prior
Under of CR
Erroneous B CH-LM 20,000
Erroneous B Cr-TM 17,000 1,213,000
Deposits in transit, end 153,000

*1,350,000+1,300,000-1,251,000
** 153,000+1,213,00 (1.4M+150T+20T+17T)-200,000+134,000 (125T+9T)

PROBLEM 8-25 Computation of Cash Shortage

Question No. 1
Unadjusted bank balance P 42,400
Outstanding checks (11,500)
Undeposited collections 5,000
Adjusted bank balance P 35,900

Question No. 2
Unadjusted book balance P 46,500
Credit memo proceeds clean draft 900
Debit memo for bank service charge (100)
Balance (cash accountability) P 47,300

Question No. 3
Adjusted bank bal. (Cash accounted) P 35,900
Cash in bank bal. (cash accountability) 47,300
Shortage as of June 30 (P11, 400)
Question No. 4
Additional cash shortage from July 1-15
July collection per duplicate O.R. P 18,800
Less: collections in July that were deposited in July
Collection per duplicate slips P 11,000
Less: Undeposited collection, June 30 5,000 6,000
Cash that should be on hand on July 15 P 12,800
Less: Actual cash on hand on July 15 4,800
Cash shortage from July 1-15 P 8,000

Question No. 5
Understatement of cash in bank per books (46,500-45,600) P 900
Overstatement of cash in bank per bank (44,000-42,400) 1,600
Understatement of outstanding checks (11,500-3600) 7,900
Overstatement of undeposited collections (5,100-5,000) 100
Non-recording of credit memo-proceeds of clean draft 900
Cash shortage as of June 30 P11,400