Activity # 2 Intermediate Accounting
# 1. 2nd Year Company’s petty cash fund has a balance of P10,000.
Coins and currencies – 1,000 Solution a
Petty cash vouchers: Coins and currencies – 1,000
Gasoline – 1,000 Medical – 300 Check drawn to the order of the petty cash custodian 2,000
IOU’s/Advances – 500 Total 3,000
Check drawn to the order of the petty cash custodian – 2.000
Personal check drawn by the petty cash custodian – 1,800
Contribution of employees for the birthday cake of one of their friends – 1,000
Requirements: a. How much petty cash fund will be included as part of cash? – P3,000
b. What is the entry to replenish the fund? -
Solution b Gasoline 1,000
Coins and currencies 1,000.00 Medical 300
Petty cash vouchers: IOU’s/Advances 500
Gasoline 1,000 Cash short 5,200
Medical 300 1,300.00 Cash in bank 7,000
IOU’s/Advances 500.00
Check drawn to the order of the petty cash custodian 2,000.00
Total accounted cash 4,800.00
Less: Total accountability ledger balance 10,000.00
Cash short (5,200)
#2. You have obtained the following details on June 2024:
Book details Bank details
Dr Cr Dr Cr
Beg. Balance – Beginning - 500,000
505,000
180,000 150,000 CN1245 - 6/5/24 - 30,000 Ref 0121 - 06/1/24 – 50,000
CN2315 - 6/15/24 -10,000 Ref 0211 - 06/8/24 – 150,000
CN2115 - 6/19/24 -40,000 Ref 0213 - 06/15/24 – 80,000
CN2225 - 6/27/24 -40,000 Ref 0415 - 06/30/24 – 70,000
535,000 Ending -730,000
Addl information:
a. The book records its check payment with no. 2115 as 4,000 - book error, -36,000 (40,000-4,000)
b. The book error caused the debits to be overstated - 5,000 - book error, -5,000
c. A bank error caused the credits with ref 0213 - 80,000 - bank error -80,000
d. NSF/DAIF checks amounted to - 10,000 – Debits Memo – 5,000
e. Application of automatic bills payments was not debited by the bank – 20,000, no records in the books - Bank/Book
error – 5,000
Solutions 1
Requirements: Prepare: 1. How much is the deposit in transit?
1. How much is the deposit in transit? – 0 Banks Total Credits Ref 0121 - 06/1/24 50,000
2. Outstanding checks? – P66,000 Ref 0211 - 06/8/24 150,000
3. Cash balance per books, beginning? P505,000 4. Cash Ref 0213 - 06/15/24 80,000
balance ending? – P535,000 Ref 0415 - 06/30/24 70,000
350,000
Less: Bank error related to Credits 80,000 c
Net Credits 270,000
Books Debits 180,000
Less: Book error related to Debits 5,000 b
175,000
Banks is higher than books, thus no deposit in transit
Intermediate Accounting 1
Solutions 2
Bank Debits CN1245 - 6/5/24 - 30,000
CN2315 - 6/15/24 - 10,000
CN2115 - 6/19/24 - 40,000
CN2225 - 6/27/24 - 40,000
120,000
Books Credits 150,000
Add: Book error related to Credits 36,000 Add in credits, less in cash
186,000
Outsanding checks 66,000
Solutions for 3 and 4
Bank, end 730,000
Add: Deposit in Transit -
Less: Outstanding checks (66,000) answer in 2
Bank error (80,000) c
Bank error (5,000) e
Adjusted Ending 579,000
Book, beginning (Squeeze) 505,000 answer in 3
Debits/Cash receipts 180,000
Credits/Disbursements (150,000)
Cash book, end befor reconciliation (Squeeze) 535,000 answer in 4
Unrecorded cash credits from bank 95,000 ans 1
Book error (36,000) a
Book error (5,000) b
NSF (5,000) d
Debit Memo (5,000) e
Adjusted Ending 579,000
#3. Classify the following if this should be included in cash. Circle only the letter that should be included as part of cash and cash
equivalents.
a. Cash on hand n. Unused credit line
b. Petty cash o. Advances to employees
c. Post-dated checks - Receivables p. IOUs
d. Bank over-draft - Liability q. Postage stamps
e. T-bills acquired prior to the 3 months maturity r. Tax fund
f. 1-year treasury bills acquired on March 1, 2023, s. Travel fund
maturing on May 15, 2023 t. Payroll fund set aside for 13th month payment for
g. Commercial papers employees
h. Money market instruments u. Dividend fund
i. Post dated check received - same C v. Cash restricted
j. Post-dated checks drawn w. Checks
k. Undelivered checks drawn x. Money orders
l. Stale checks y. Bank drafts – part of cash
m. Unreleased checks z. Demand deposits
Intermediate Accounting 1
