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Activity No. 1

The document provides details on the cash balances and classifications for the statement of financial position of several companies on December 31, 2014. It includes cash, checks, and other items that affect the total cash amount reported. The key information is: - Venus Company should report total cash of P4,462,500 - Vulcan Company should report total cash of P2,450,000 - CPU Corporation should report cash of P160,000 - Vesta Company should report cash of P1,755,000 - Hermes Company should report cash and cash equivalents of P2,600,000

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Justine Maravilla
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256 views2 pages

Activity No. 1

The document provides details on the cash balances and classifications for the statement of financial position of several companies on December 31, 2014. It includes cash, checks, and other items that affect the total cash amount reported. The key information is: - Venus Company should report total cash of P4,462,500 - Vulcan Company should report total cash of P2,450,000 - CPU Corporation should report cash of P160,000 - Vesta Company should report cash of P1,755,000 - Hermes Company should report cash and cash equivalents of P2,600,000

Uploaded by

Justine Maravilla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Following were the account balances of Venus Company at December 31, 2014:

Cash on hand  P  187,500


Cash in current and savings accounts 3,375,000
Cash set aside for plant expansion (expected
for 2,400,000
     payment in 2015)

Cash in current and savings accounts includes P900,000 as holdout against short-term loan
arrangements.  There are no legal restrictions as to withdrawal by Venus on these holdouts.  What is the
total cash that should be reported in the current assets section of Venus’ December 31, 2014 statement of
financial position?

P4,462,500

2. On December 31, 2014, Vulcan Company had the following cash balances:
Cash in banks P1,800,000
Petty cash funds (all funds were reimbursed on 50,000
12/31/14)

Cash in banks included P600,000 in a separate bank where-in the company is required to maintain a
minimum average of P800,000 of 10 workings on a rolling basis.
In the current assets section of Vulcan’s December 31, 2014 statement of financial position, what total
amount should be shown as cash?

P2,450,000

3. CPU Corporation’s checkbook balance on December 31, 2014 was P160,000.  On the same date,
CPU held the following items in its safe:

 A P5,000 check payable to CPU dated January 2, 2015, was not included in the December 31
checkbook balance.
 A P3,500 check payable to CPU which was deposited December 19 and included in the
December 31 checkbook balance, was re-deposited on January 2, 2015 and cleared on January 9.
 A P25,000 check payable to a supplier and drawn on CPU’s account, was dated and recorded on
December 31, but was not mailed until January 19, 2015.

In its December 31, 2014 statement of financial position, how much should CPU report as cash?

P160,000
4. Vesta Company had the following cash balance at December 31, 2014:

Undeposited coins and currency P    35,000


Unrestricted demand deposits 1,450,000
Company checks written (and deducted from the demand 
     deposits amount) but not scheduled to be mailed until
     January 2 270,000
Time deposits restricted for use (expected use in 2015) 3,000,000

In exchange for a guaranteed line of credit, Vesta has agreed to maintain a minimum balance of P150,000
in its unrestricted demand deposits account.  How much should Vesta report as “Cash” in its December
31, 2014 statement of financial position?

P1,755,000

5. Hermes Company reported a total cash and cash equivalent of P6,325,000 on December 31, 2014,
which includes the following information:
a. Two certificates of deposits, each totaling P500,000.  These certificates of deposit have a maturity
of 120 days.
b. A check that is dated January 12, 2015 in the amount of P125,000.
c. A commercial paper of P2,100,000 which is due in 120 days.
d. Currency and coins on hand amounted to P7,700.00

Hermes Company has agreed to maintain a cash balance of P500,000 in one of its banks at all times and it
is not available for withdrawal and to ensure future credit availability (this amount was included in the
above balance).  How much is the correct amount of cash and cash equivalents that Hermes Company
should report in its December 31, 2014 statement of financial position?

P2,600,000
a – c are deducted to the reported total cash and cash equivalent

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