THEORIES (1PT EACH)
1. A
2. B
3. D
4. B
5. D
6. A
7. D
8. B
9. A
PROBLEMS:
PROBLEM 1: (5PTS EACH
ITEM)
1. 3,184,000 Notes: EXPLANTION:
Current account Must be presented as a
-100,000
at Allied Bank
liability
When a bank account is in
a closed/bankrupt bank,
cash deposited in such
Savings deposit in
150,000 bank shall not be included
a closed bank
in Cash account but
presented as Noncurrent
SOLUTION: asset
These are not items of
Current account at Metro
1,800,000 Postage stamps 1,000 cash. These are presented
Bank
as Supplies
Employee’s
Payroll account 500,000 4,000
postdated check
PDC
Foreign bank account IOU from Receivable from
800,000 10,000
(equivalent pesos) employees employee
Credit memo
Traveler’s check 50,000 from a vendor for 20,000
a purchase return
Not an item of cash.
Petty cash fund
The expense receipts not
(P4,000 in replenished must be
Money order 30,000 currency and 6,000 deducted from the
expense receipts imprest balance of the
for P6,000)
PCF
Petty cash fund (P4,000 in When problem is silent,
currency and expense 4,000 Pension fund 2,000,000 this is presented as
receipts for P6,000) Noncurrent asset
DAIF check of
Total Cash 15,000
3,184,000 customer Receivable from customer
Customer’s check
80,000
dated 1/1/2012 PDC
Money market
2. 3,584,000 placement due 500,000
on 6/30/2012 Short-term investment
Treasury bills due
on 1/31/2012 and
300,000
purchased
2/1/2011 Short-term investment
SOLUTION:
Total Cash 3,184,000
Time deposit – 30 days 200,000
Treasury bills due on
3/31/2012 and purchased 200,000
12/31/2011
Total CCE 3,584,000
PROBLEM 2: (5 PT)
1. 170,000
Notes:
Not included as cash,
regardless of the term of
the agreement. The same
Compensating shall be presented as
50,000
balance (BPI) Current/Noncurrent
asset, depending on the
term, but never as cash
Solution: because of restriction.
Cash in bank –
Cash on hand 100,000 BDO (current 300,000 NCA - Set aside for the
account) purchase of equipment
Cash in bank –
Cash in bank – BPI (savings
150,000 BDO (savings -30,000
deposit)
deposit) Liability
Not included as cash. The
same shall be presented
as Current/Noncurrent
Cash in bank – asset, depending on the
Cash in bank – BPI (current
-80,000 PNB(deposit in 100,000 term, but never as cash
account)
escrow) because of Escrow
deposit/accounts cannot
be used for current
operations.
Cash in bank –
Cash, December 31, 2012. PNB (current -20,000
170,000 account) Liability
PROBLEM 3: (5PT)
1. 66,000
Cash, beg. Balance 47,000 Notes:
Cash received from A/R
101,000
and Sales: Inventory, beg.
Purchases (?) -
A/R beg. 82,000
to be squeezed 892,000
Goods available
Add: Sales 1,150,000
for sale 993,000
Less: A/R end. -116,000 Inventory, end. 93,000
Cost of goods
Total collections this year 1,116,000 sold 900,000
Cash paid for A/P and
Purchases and OPEX:
A/P beg. 68,000
Add: Purchases 892,000
Operating expenses 200,000
Less: A/P end. -63,000
1,097,000
Cash, end. Balance 66,000
Problem 4: (5PT)
Office Supllies Expense 4,000
Postage Supplies 2,000
Transportation Expenses 600
Cash Short or Over 400
Cash in bank 7,000
Problem 5: (15 PT EACH
ITEM)
1. 75,000
Book Bank
203,000 106,000
A -30,000 NSF Check
B -62,000 DM
Book error
(Understatement
C 900 of Receipts)
D -1,830 DM
CM with Service
E 25,500 charge
F 24,000 DIT
Book error
G -180 (Understatement
of
Disbursements)
Book error
(Overstatement
of
29,610 Disbursements)
H -35,000 OC
Bank error
(Misappropriated
I -20,000 deposit)
PCF is not cash in
J -10,000 bank
Loss from
K -60,000 pilferage
Book error
(Overstatement
L -20,000 of Receipts)
75,000 75,000
2. The journal entries are:
A. Accounts Receivable 30,000
Cash in bank 30,000
B. Accounts Receivable 62,000
Cash in bank 62,000
C. Cash 900
Accounts Receivable 900
D. Bank Service Charge 1,830
Cash 1,830
E. Cash 25,500
Bank Service Charge 500
Notes Receivable 25,000
Interest Income 1,000
G. Accounts Payable 180
Cash 180
Cash 29,610
Accounts Payable 29,610
J. Petty Cash Fund 10,000
Cash 10,000
K. Loss from pilferage 60,000
Cash 60,000
L. Accounts Receivable 20,000
Cash 20,000
Problem 6:
1. 29,980
2. 564,380
3. 546,200
4. 48,160
Solution:
August Receipts Disbursements September
Unadjusted bank balance 33,020 562,140 550,900 44,260
Add: DIT, Aug 31 5,480 -5,480
DIT, Sept 30 6,220 6,220
Less: OC, Aug 31
(Adjusted for Item L) -8520 -8520
OC, Sept 30
(Adjusted for Items A and
L) 6340 -6340
Others:
E. Erronesous bank
charge -4020 4020
Not known to bank:
F. Expenses made out of
collections 1500 1500
Adjusted bank balance 29,980 564,380 546,200 48,160
August Receipts Disbursements September
Unadjusted book balance 26,580 559,080 549,270 36,390
Add: CM, Aug 31 2,400 -2,400
CM, Sept 30 3,200 3,200
Less: DM, Aug 31 -1,900 -1,900
DM, Sept 30 1,280 -1,280
Others:
B. NSF check not
recorded 1600 -1600
C. NSF check in August,
recorded in September -2,100 2,100
D. NSF check returned
and recorded in
September 1,800 1,800
G. Erroneous record of
receipt 600 600
H. Erroneous record of
disbursement -5,850 5,850
K. Mutilated check with
replacement, all recorded
as receipts 5,000 5,000
Adjusted book balance 29,980 564,380 546,200 48,160
Problem 7: 10,460
1. 10,460
Balance per
books NOTE: PERFORM BANK
Solution: (SQUEEZED) 10,460 TO BOOK METHOD
Balance per bank Bank charges not
11,164 -16
statement recorded
Note collected by
Receipts recorded but not bank and not
1,340 1,120
yet deposited in the bank recorded on
books
NSF checks not
recorded on
Outstanding checks -1,100 -160
books nor
redeposited
Adjust cash balance 11,404 11,404
