Composition of cash & Petty cash

Problem

1. John Macias Company provided the following data on December 31, 2021:

Cash in bank – demand deposit 5,000,000

Cash on hand 1,000,000
Traveler check 800,000
Certificate of time deposit 2,500,000
Money order 50,000
Petty cash fund 25,000
Postdated customer check 500,000

What total amount should be reported as cash at year-end?

a. 7,375,000
b. 6,850,000
c. 6,875,000
d. 9,875,000

2. Adela Company provided the following information about the composition of its cash on December 31,
2021:
o Commercial savings account of P800,000 and a commercial checking account balance of
P900,00 are held at Metrobank.
o Money market fund account held by Banco de Oro that permits Adela to write checks in this
balance, P3,000,000.
o Travel advances of P200,000 for executive travel for the first quarter of next year (employee to
pay through salary deduction).
o Petty cash fund of P30,000.
What is the correct amount of “cash and cash equivalents” Adela Company should report in its
December 31, 2019 statement of financial position?
a. 1,700,000 c. 4,730,000
b. 3,000,000 d. 4,700,000

3. On December 31, 2020, the cash account of Absydy Company showed the following details:

Undeposited collections 63,000

Cash in bank – PCIB checking account 500,000
Cash in bank – PNB (overdraft) ( 40,000)
Undeposited check from a customer, dated
January 15, 2021 30,000
Cash in bank – PCIB (fund for payroll) 170,000
Cash in bank – PCIB (saving deposit) 250,000
Cash in bank – PCIB (money market instrument, 90days) 3,250,000
Cash in foreign bank (restricted) 75,000
Sinking fund cash 500,000
 On December 31, 2020, what should be reported as “cash and cash equivalents”?
a. 3,333,000
b. 4,433,000
c. 4,233,000
d. 3,443,000

4. Burr Company had the following account balances at December 31, year 2:
Cash in banks $2,250,000 Cash on hand 125,000 Cash legally restricted for additions to plant (expected
to be disbursed in year 3) 1,600,000 Cash in banks includes $600,000 of compensating balances
against short-term borrowing arrangements. The compensating balances are not legally restricted as to
withdrawal by Burr. In the current assets section of Burr’s December 31, year 2 balance sheet, total
cash should be reported at
a. $1,775,000
b. $2,250,000
c. $2,375,000
d. $3,975,000

5. Garcia Company had the following cash balance at July 31, 2021:
Undeposited coins and currency P 40,000
Unrestricted demand deposits 1,560,000
Company checks written (and deducted
from the demand deposits amount) but not
scheduled to be mailed until August 2. 370,000
Time deposits restricted for use (expected
use in 2022) 3,000,000

In exchange for a guaranteed line of credit, Garcia has agreed to maintain a minimum balance of
150,000 in its unrestricted demand deposits account. How much is the correct cash to be reported in the
statement of financial position?
a. 1,870,000 c. 4,970,000
b. 1,970,000 d. 3,000,000

6. Supreme Company had the following account balances on December 31, 2019:

Cash in Bank- current account 6,000,000

Cash in Bank- payroll account 1,500,000
Sinking fund cash 3,000,000
Cash in Bank- restricted account for branch expansion
And expected to be disbursed in 2020 2,000,000
Cash on Hand 800,000
Money Market instrument maturing on April 30, 2020 1,500,000
Petty Cash Fund 60,000

 The petty cash fund included employee IOU P8,000

 The cash on hand included a postdated check P150,000

What total amount should be reported as Cash and Cash Equivalents on December 31, 2019?
 a. 12,702,000
b. 11,202,000
c. 8,202,000
d. 11,210,000

7. Claudel Company provided the following information on December 31, 2021:

Cash on hand 1,250,000

Cash in bank- BDO payroll fund 350,000
Cash in bank- RCBC (overdraft) (25,000)
Petty cash fund 50,000
Money market placement due on April 30, 2022 1,000,000
Pension fund 3,000,000
Value added tax account 400,000
Foreign bank account- unrestricted (in equivalent pesos) 5,000,000
Undeposited NSF check received from a customer,
dated December 1, 2021 25,000
Traveler’s check 300,000
Check payable to Claudel, dated January 7, 2022 in
payment of a sale made in October 2021, not
included in checkbook balance 2,000,000
Bond sinking fund 850,000
IOUs signed by employees, taken from collections 13,000
Deposit in bank closed by BSP 300,000
TOTAL P14,513,000

What total amount of cash and cash equivalents should be reported on December 31,
2022?
a. 14,513,000 c. 9,325,000
b. 14,213,000 d. 7,350,000

8. Beldad Company reported its December 31, 2020 checkbook balance at 5,000,000. Data about certain
cash items follows:

 A customer check amounting to P150, 000 dated January 3, 2021 was included in the December
31, 2020 checkbook balance.
 Check drawn to Beldad’s account worth P 300,000, payable to a vendor, dated and recorded in
Beldad’s books on December 31, 204 but not delivered until January 11, 2021.
 Another customer check for 500,000 deposited on November 30, 2020 was included in the
checkbook balance but returned for insufficiency of fund. The check was redeposited on
December 20, 2020 and cleared two days later.
 A check worth P150, 000 payable to supplier dated and recorded on December 29, 2020 was
mailed on January 13, 2021.
 A petty cash fund of P55, 000 with the following summary on December 31, 2020:

Coins and currencies P5, 000

Petty cash vouchers 43,000
Employee’s vales 2,000
Check drawn by Beldad
Company marked “collections for Thanksgiving party” 5,000
  A check of P43, 000 was drawn on December 31, 2020 payable to Petty Cash.

What total amount should be reported as “cash” on December 31, 2020?

a. 5,000,000
b. 5,048,000
c. 5, 348,000
d. 5,355,000

9. On December 31, 2020, Kelly Company reported accounts with the following details:

Undeposited Collections P60,000

Cash in bank- PCOS checking account 600,000
Cash in bank- PNP (overdraft) (80000)
Undeposited NSF check received from customer,
dated December 1, 2020 15,000
Undeposited check from a customer, dated January 15, 2021 30,000
Cash in bank- PCIT (payroll fund) 150,000
Cash in bank – PCIT (money market, 90 days) 2,000,000
Cash in bank- PCOS (saving deposit) 100,000
Cash in foreign bank restricted 100,000
IOU’s from officers 30,000
Sinking Fund cash 450,000
Financial asset held for trading 120,000

On December 31, 2020, which total amount should be reported as “cash and cash equivalents”?
a. 2,760,000
b. 2,910,000
c. 2,870,000
d. 910,000

10. LB Company reported petty cash fund which comprised the following:

Coins and Currency P 5,300

Paid vouchers
Transportation 600
Gasoline 400
Office supplies 1,500
Postage Stamps 150
IOU’ signed by employees 750 3,400
Check drawn by LB Company to the order of the petty
cash custodian 3,000

What is the correct amount of petty cash fund for statement presentation purposes?

a.5, 300
b.8, 300
c.8, 700
d.11, 700
11. On May 1, 2020, Cristine Company established an imprest petty cash fund for P 20,000 by writing a
check drawn against the checking account. On May 31, 2020, the fund consisted the following:

Currency and coins 2,000

Receipts for supplies 4,000
Receipts for transportation 3,000
Due from employees 1,200
Traveler’s check 3,000

At the end of the month, the entity wrote a check to replenish the fund. What is the replenishment under
the imprest fund system?
a) 6,800
b)18,000
c) 11,800
d) 20,000

12. The cash balance per book of Jeffrey Company on December 31, 2020 was 8,000,000.

 A petty cash fund of 50,000 with the following summary on December 31, 2020:
Coins and currency 5,000
Petty cash voucher 40,000
Postage Stamps 5,000
 A 300,000 check payable to supplier dated and recorded December 29, 2020 was mailed on
January 8, 2021
 A customer check amounting 250,000 dated January 3, 2021 was included in December 31,
2020 check book balance.

What is the correct cash balance on December 31, 2020?

a. 8,595,000
b. 8,000,000
c. 8,095,000
d. 8,245,000

13. The petty cash fund (imprest balance of 45,000) of Kaila Company on December 31, 2020 is composed
of the following:

Coins and currencies P 17,000

Petty cash vouchers:
Postage Stamps 1,000
Supplies 2,000
Cash advances to employees 3,000
Employee's check returned by bank marked DAIF 4,000
Replenishment check drawn by the company payable to
the order of Arlene, petty cash custodian 18,000
Unused postage 500
Check payable to Meralco, for payment of the
company's utility bills 3,500
A sheet of paper with names of employees together with
contribution for a birthday gift of a co-employee
in the amount of 4,500
Total P 53,500
 Questions:

1. How much is the cash shortage or overage as of December 31, 2020? Indicate whether shortage
or overage.
a. Overage of P4,000 c. Shortage of P4,000 e. answer not given
b. Overage of P4,500 d. Shortage of P4,500

2. How much petty cash fund shall be shown as part of "Cash" balance as of December 31, 2020?
a. P 38,000 c. P 35,000
b. P 20,000 d. P 17,000

14. You were assigned to audit the Cash account of Jerome, Inc. as of December 31, 2020. Your cash
count of the Petty Cash Fund and undeposited collections as of that date showed the following:

Currency and coins P 6,400.00

Expense vouchers 3,000.00
Employees' IOUs 5,500.00
Customers' checks in payment of accounts 4,800.00
Total P 19,700.00

The amount of Petty Cash Fund per general ledger is P15,000. Upon comparing the official receipts with
the bank validated deposit slips, you noted that P5,500 was not yet deposited to the bank.

Questions:

1. What is the amount of cash shortage?

a. P 100 c. P 5,400
b. P 800 d. P 10,200

2. What is the amount of Petty Cash Fund to be shown on December 31, 2020 statement of
financial position?
a. P 11,200 c. P 15,000
b. P 5,700 d. P 7,100

15. A count of the petty cash fund on January 3, 2021 revealed the following composition:

Bills and coins 7,300

Vouchers:
December 2020 dates 850
January 2021 dates 200
IOUs (all dated December 2020) 4,200
Employee’s chech dated December 27, 2020 2,800
Employee’s check dated January 14, 2021 4,250
Unsigned pay envelope payable to an employee (the envelope
has been opened and the money has been removed) 5,000

The balance of petty cash fund per books is P 15,000.

Questions:
1. How much is the cash shortage or overage?
a. 350 b. 400 c. 500 d. 550

2. What is the correct amount of petty cash fund to be shown on the statement of financial
position as of December 31, 2020?
a. 9,500 b. 10,300 c. 2,800 d. 5,300