1.

All of the following are considered as cash equivalents, except

a. Treasury bills with original term of one year but acquired three months before maturity date.
b. Redeemable preference shares with original term of four-years but acquired two months before
maturity.
c. Investment in ordinary shares of another entity that is expected to be sold within the next two weeks.
d. All of the above are considered as cash equivalents.

2. As of December 31, 2023, an entity reported P800,000 positive balance in its checking account no. 1 in
Buko Bank and P500,000 overdraft in its checking account no. 2 in the same bank. Which of the following
correctly states the required reporting of these amounts?
a. The P800,000 positive balance shall be presented as part of cash and cash equivalents while the
P500,000 overdraft shall be presented as current liability.
b. The P500,000 overdraft shall be presented as part of cash and cash equivalents while the P800,000
positive balance shall be presented as current liability.
c. Net amount of P300,000 shall be presented as part of cash and cash equivalents.
d. Net amount of P300,000 shall be presented as current liability.

3. As of December 31, 2022, AURING Company reported the following unadjusted general ledger balances:

Cash on hand P1,480,000

Petty cash fund 100,000
Cash in bank 7,000,000
Cash funds 5,900,000
Cash equivalents 8,000,000

Other data regarding these balances are the following:

a. Included in the cash on hand are the following checks:

i. Customer check amounting to P260,000, dated January 31, 2023.
ii. Customer check amounting to P180,000, dated February 14, 2022.

b. Based on the inspection of the petty cash fund, coins and currency amounted to P25,000, while the
remaining P70,000 are in the form of petty cash vouchers.

c. Cash in bank included the following items:

Checking Account No. 1, ALPHA Bank P4,500,000

Checking Account No. 2, ALPHA Bank (1,000,000)
Checking Account No. 1, DELTA Bank (3,000,000)
Checking Account No. 2, DELTA Bank 2,500,000
Time deposit, 12/1/22 – 2/1/23 4,000,000
Total cash in bank P7,000,000

d. Cash funds included the following amounts:

Business travel fund P500,000

Fund for machinery acquisition 1,200,000
Bonding sinking fund (related bonds will mature on 2028) 2,300,000
Payroll fund 1,150,000
Other operating fund 750,000
Total cash funds P5,900,000
 e. Cash equivalents included the following investments:

Original Issue Date Purchased

Investment Amount Date Maturity Date
Money market placements P3,000,000 12/10/22 6/15/22 1/15/23
Commercial papers 3,400,000 6/15/22 12/10/22 1/10/23
Treasury bills 1,600,000 5/1/22 11/30/22 1/30/23
P8,000,000

From the given information, the adjusted cash and cash equivalents balance shall be

a. P12,845,000 c. P16,845,000
b. P15,965,000 d. P19,845,000

In its bank reconciliation for the month of January 2023, KISSES Company reported the following reconciling
items:
 Bank service charge and NSF check amounted to P56,000 and P145,000, respectively.
 Proceeds from bank loan amounted to P1,000,000.
 Deposits in transit and outstanding checks amounted to P880,000 and P940,000, respectively.
 Check of P340,000 was recorded as P430,000.
On the other hand, reconciling items for the month of February are the following:
 Bank service charge and payment of maturing portion of bank loan amounted to P45,000 and
P200,000, respectively.
 Company’s notes collected by the bank amounted to P550,000.
 Deposits in transit and outstanding checks amounted to P440,000 and P649,000, respectively.
 Deposit of P210,000 was recorded as P120,000.
Unadjusted book debits and unadjusted book credits amounted to P5,600,000 and P4,500,000,
respectively.
From this information, determine the adjusted book debits for the month of February 2023
a. P5,240,000
b. P5,150,000
c. P5,060,000
d. P5,330,000
The adjusted book credits for the month of February 2023 shall amount to
a. P4,544,000
b. P4,454,000
c. P4,364,000
d. P4,634,000

While check the cash accounts of Mouse Company on December 31, 2021, you found the following
information:

Balance per books P67,760

Balance in checking account (outstanding checks
per books of P9,876) 55,323
Deposits in bank closed by BSP 16,000
Currency and coins counted 9,500
 Petty cash fund (of which P450 is in the form
of paid vouchers) 1,000
Bank charges not yet taken up in the books 58
Bond sinking fund – cash 10,000
Receivables from employees 700
Book error in recording a check, the correct
amount as paid by the bank is P890 instead
of P980 as recorded in the books,
or a difference of opinion 90

1. What is the correct cash in bank balance of Ruler Company on December 31, 2021?

a. 55,415
b. 67,792
c. 70,229
d. 83,792

2. What is the correct cash on hand balance for Ruler Company on December 31, 2021?

a. 9,500
b. 10,050
c. 12,895
d. 19,500

Question 8 – 9:

Shown below in the bank reconciliation of GeForce Company for December 2021:

Balance per bank, December 31, 2021 75,000

Add: Deposits in transit 12,000
Total 87,000
Less: Outstanding checks 14,000
Bank credit recorded in error 5,000 19,000
 Cash balance per book, December 31, 2021 68,000

The bank statement for January 2022 contains the following data:

Total deposits 55,000

Total charges, including an NSF check of
4,000 and a service charge of 200 48,000

All outstanding checks on December 31, 2021, including the bank credit, were cleared in bank in January
of 2022. There were outstanding checks of 15,000 and deposits in transit of 19,000 on January 31, 2022.

3. What is the cash balance per bank on January 31, 2022?

a. 75,000
b. 82,000
c. 86,000
d. 86,200

4. What is the cash balance per books on January 31, 2022?

a. 73,800
b. 88,200
c. 90,200
d. 94,400

Question 10:

At the end of the current year, an entity had various checks and papers in the safe. Which item should
not be included in the cash account in the current year-end statement of financial position?

a. US P20,000 cash
b. Past due promissory note issued in favor of the entity by the President.
c. Another entity’s P150,00 check payable to the entity dated December 15 of the current year.
d. The entity’s undelivered check payable to a supplier dated December 31 of the current year.

ABC Company held the following on December 31, 2021:

o Sinking fund cash - P330,000
o Sinking fund securities - P250,000 (acquired 120 days before the maturity date)
o Redeemable Preference on February15, 2022, acquired on December 23, 2021 – P55,000
o 120-day, Time deposit dated October 15, 2021, acquired on December 31, 2021 – P110,000
o 12 months treasury bill – P250,000, dated April 1, 2021, acquired on November 25, 2021.
o Petty cash fund - P20,000
 Coins and currency P 5,400
  Check payable to petty cashier representing her salary 6,250
 Unused Supplies 500
 Voucher for petty cash disbursement
Transportation P 750
Supplies 1,500
Gas and oil 3,500
Repairs 2,000
Miscellaneous 100 7,850
Total P 20,000
o The sinking fund were set aside for the retirement of 5-year 12%, bonds that were issued on
Jan 3, 2017, P500,000

Compute for the amount of Petty Cash Fund to be reported under Cash and Cash Equivalent as
of December 31, 2021. 11,650
Compute for the Total Cash Equivalent to be reported as of December 31, 2021. 745,000

In preparing its August 31, 2021 bank reconciliation, Adel Corp. has available the following information:

Balance per bank statement, 8/31/21 P21,650

Deposit in transit, 8/31/21 3,900

Return of customer's check for insufficient funds, 8/30/21 600

Outstanding checks, 8/31/21 2,750

Bank service charges for August 100

At August 31, 2021, Adel's correct cash balance is ______. P22,800.

Sandy, Inc. had the following bank reconciliation at March 31, 2021:

Balance per bank statement, 3/31/21 P37,200

Add: Deposit in transit 10,300

47,500

Less: Outstanding checks 12,600

Balance per books, 3/31/21 P34,900

 Data per bank for the month of April 2021 follow:

Deposits P46,700

Disbursements 49,700

All reconciling items at March 31, 2021 cleared the bank in April. Outstanding checks at April 30,
2021 totaled P6,000. There were no deposits in transit at April 30, 2021. What is the cash
balance per books at April 30, 2021? P28,200

Tanner, Inc.’s checkbook balance on December 31, 2021 was P21,200. In addition, Tanner held the
following items in its safe on December 31.

(1) A check for P450 from Peters, Inc. received December 30, 2021, which was not
included in the checkbook balance.

(2) An NSF check from Garner Company in the amount of P900 that had been deposited at
the bank, but was returned for lack of sufficient funds on December 29. The check was
to be redeposited on January 3, 2022. The original deposit has been included in the
December 31 checkbook balance.

(3) Coin and currency on hand amounted to P1,450.

The proper amount to be reported on Tanner's balance sheet for cash at December 31, 2021 is

22,200.

The cash account shows a balance of P45,000 before reconciliation. The bank statement does not
include a deposit of P2,300 made on the last day of the month. The bank statement shows a
collection by the bank of P940 and a customer's check for P320 was returned because it was
NSF. A customer's check for P450 was recorded on the books as P540, and a check written for
P79 was recorded as P97. The correct balance in the cash account was

c. P45,548.

The following information were taken from the books of Survivor Corporation:
a) Balances of cash account per the general ledger at Nov. 30, and December 31, were: P38,020.00 and
P9,770.00 respectively.
b) Balance of demand deposits at the National Bank at December 31, per bank confirmation was P10,000.00.
c) Outstanding checks at Dec. 31 amounted to P4,000.00.
d) An N.S.F. check for P245.00 was charged by the bank in December. This check was obtained from a customer
on account.
e) Deposits in transit at the beginning and end of month were P2,500 and P3,500, respectively.
f) Exchange and collection charges deducted by the bank in the amount of P25.00 for Dec. have not been
recorded. Those charges for the month of November totaled P20.00.
g) The reconciliation data as of Nov. 30 showed that the balance per bank statement was
P45,000.00 and the outstanding checks totaled P10,000.00.
h) In Nov., the bank charged in error a P260.00 check to the Jackson Co., account. It was corrected by the bank in
December.
i) Total deposits shown by the bank statement for December amounted to P100,000.00.
j) A check issued for P480 in November was recorded in the cash book for P240.
k) Following is a summary of cash receipts and disbursement for the month indicated.
November December
Receipts............... P102,470 P100,740
Disbursements ... 129,880 128,990
Compute for the following:
1) Adjusted cash in bank balance for the month of November. 37,760
2) Adjusted cash receipts balance for December. 100,740
3) Adjusted cash disbursement balance for December. 129,000
4) Adjusted cash in bank balance for December. 9,500