Assignment No. 1 - Cash and Cash Equivalents

Pamantasan ng Cabuyao
Katapatan Homes Subdivision. Brgy. Banay- Banay, City of Cabuyao

Intermediate Accounting Part 1
Cash and Cash Equivalents
Assignment No. 1
Name: Score:
Course & Section: Date:
Problem 1:
Pygmalion Company had the following account balances on December 31, 2021:
Cash in Bank- Current Account 5,000,000

Cash in Bank- Payroll Account 1,000,000
Cash on Hand 500,000
Cash in Bank- restricted account for building
Construction expected to be disbursed in 2022 3,000,000
Time deposit, purchased December 15, 2021 and
Due March 15, 2022 2,000,000
The cash on hand included a Php 200,000 check payable to Pygmalion, dated January 15, 2022. What
total amount should be reported as ‘Cash and Cash Equivalents” on December 31, 2021?
Problem 2:
Thor Company provided the following data on December 31, 2021:
Checkbook Balance 4,000,000

Bank Statement Balance 5,000,000
Check drawn on Thor’s account, payable to supplier,
Dated and recorded on December 31, 2021, but
Not mailed until January 15, 2022 500,000
Cash in Sinking Fund 2,000,000
On December 31, 2021, what amount should be reported as “Cash” under current assets?
Problem 3:
The accountant of Santiago Company is in the process of preparing the company’s financial statements
for the year ended December 31, 2021. He is trying the correct balance of cash and cash equivalents to be
reported as a current asset on the statement of financial position. The following items are being
considered:
 Balances in the company’s accounts at the Metropolitan Bank:

Current Account 81,000
Savings Account 132,600
 Undeposited customer checks of Php 22,200 (including a customer check dated January 2, 2022
for Php 3,000).
 Currency and coins on hand of Php 3,480.
 Savings account at the Northern Philippines Bank with a balance of Php 2,400,000. This account
is being used to accumulate cash for future plant expansion (in 2022).
 Petty cash of Php 4,000 (currency of Php 1,200 and unreplenished vouchers for Php 2,800).
 Php 120,000 in a current account at the Northern Philippines Bank. This represents a 20%
compensating balance for Php 600,000 loan with a bank. Santiago Company is legally restricted
to withdraw the funds until the loan is due in 2024.
 Treasury bills:
Two- month maturity bills 90,000

Seven- month bills 120,000
 Time Deposit 100,000
What is the correct balance of cash and cash equivalents to be reported in the current assets section of
the statement of financial position?
Problem 4:
The December 31, 2021 Financial Statements of Dionisio Corporation reveals the following:
Current account at Prime Bank (Php 30,000)

Current account at Prudent Bank 135,000
Treasury bills (acquired 3 months before maturity) 300,000
Treasury bills (maturity date is December 31, 2022) 1,500,000
Payroll account 390,000
Foreign bank account- restricted (translated using the
December 31, 2021, exchange rate) 2,000,000
Postage stamps 1,250
Employee’s postdated check 4,500
IOU from the Vice- President 8,000
Credit memo from a supplier for a purchase return 8,100
Traveler’s check 21,000
Money order 12,900
Petty cash fund (Php 3,000 in currency and expense
Receipts for Php 12,000) 15,000
What amount would be reported as “Cash and Cash Equivalents” in the statement of financial
position on December 31, 2021?
Problem 5:
Everlast Company reported the following information at the current year- end:
 Investment securities of Php 1,000,000. These securities are share investments in entities that are
traded in the Philippine Stock Exchange. As a result, the shares are very actively traded in the
market.
 Investment securities of Php 2,000,000. These securities are government treasury bills. The
treasury bills have a 10- year term and purchased on December 31 at which time they had two
months to go until they mature.
 Cash of Php 3,400,000 in the form of coin, currency, savings account and checking account.
 Investment securities of Php 1,500,000. These securities are commercial papers. The term of the
papers in nine months and they were purchased on December 31 at which time they had three
months to go until they mature.
What total amount should be reported as cash and cash equivalents at the current year- end?
Problem 6
The Cash account of Bea Corporation as of December 31, 2021 was composed of the following:
On deposit in current account with the BPI Php 900,000
Cash collection not yet deposited to the bank 350,000
A customer’s check returned by the bank for insufficient fund 150,000
A check drawn by the Vice President of the company

Dated January 5, 2022 70,000
A check drawn by a supplier dated December 28, 2021

For goods returned by the company 60,000
A check dated May 31, 2021 drawn by the company against the
Bank of Manila in payment of custom duties. Since the
Importation did not materialize, the check was returned by the
Customer broker. This check was an outstanding check in the
Reconciliation of Bank of Manila 410,000
Petty cash fund of which Php 10,000 is in currency, Php 7,200

In form of employee’s IOU’s; and Php 2,800 is supported by
Approved petty cash vouchers for expenses all dated prior to
Closing of the books on December 31, 2021 20,000
Total 1,960,000
Less: Overdraft with the Bank of Manila secured by
A chattel mortgage on the inventories 300,000
Cash Balance per Ledger Php 1,660,000
What is the amount of cash to be reported in the December 31, 2021 statement of financial position of
Bea Company?
Problem 7
Campbell Company had the following account balances on December 31, 2021:
Petty cash fund 50,000

Cash in bank- current account 4,000,000
Cash in bank- sinking fund 2,000,000
Cash on hand 500,000
Cash in bank- restricted account for plant addition,
Expected to be disbursed in 2022 1,500,000
Treasury bills 1,000,000
The petty cash fund included unreplenished December 2021 petty cash expense vouchers of Php
10,000 and employee IOU of Php 5,000. The cash on hand included a Php 100,000 check payable to
Campbell dated January 15, 2022. In exchange for a guaranteed line of credit, the entity has agreed to
maintain a minimum balance of Php 200,000 in its unrestricted current bank account. The sinking
fund is set aside to settle a bond payable that is due on June 30, 2022. What total amount should be
reported as “cash and cash equivalents” on December 31, 2021?
Problem 8
The auditor of Samantha, Inc. examined the petty cash fund immediately after the close of business,
July 31, 2021, the end of the company’s natural business year. The petty cash custodian presented he
following during the count:
Currency 1,650
Petty cash vouchers:
Postage 420
Office supplies expense 900
Transportation expense 340
Computer repairs 800
Advances to office staff 1,500
A check drawn by Samantha, Inc., payable to the
Petty cash custodian 7,200
Postage stamps 300
An employee’s check, returned by bank, marked NSF 1,000
An envelope containing currency of Php 1,890 for
A gift for retiring employee 1,890
Php 16,000
The general ledger shows an imprest petty cash fund balance of Php 16,000.
1. How much is the petty cash shortage or overage?

2. What is the adjusted balance of the petty cash fund at July 31, 2021?
Problem 9
Tawiran Company reported cash account which consisted of the following:
Bond sinking fund 1,500,000

Checking account in BPI (A Php 320,000 check is
Still outstanding per bank statement) 3,155,000
Currency and coins awaiting deposit 1,135,000
Deposit in a bank closed by BSP 500,000
Petty cash fund (of which Php 10,000 is in the form
Of paid vouchers) 50,000
Receivables from officers and employees 175,000
What total amount of cash should be reported under current assets?
Problem 10
At year- end, Myra Company reported cash and cash equivalents which compromised the following:
Cash on hand 500,000

Demand deposit 4,000,000
Certificate of deposit 2,000,000
Postdated customer check 300,000
Petty cash fund 50,000
Traveler’s check 200,000
Manager’s check 100,000
Money order 150,000
What total amount should be reported as “cash” at year- end?

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Pamantasan ng Cabuyao

Katapatan Homes Subdivision. Brgy. Banay- Banay, City of Cabuyao

Cash in Bank- Current Account 5,000,000

Thor Company provided the following data on December 31, 2021:

Checkbook Balance 4,000,000

 Balances in the company’s accounts at the Metropolitan Bank:

Two- month maturity bills 90,000

 Time Deposit 100,000

Current account at Prime Bank (Php 30,000)

On deposit in current account with the BPI Php 900,000

Cash collection not yet deposited to the bank 350,000

A customer’s check returned by the bank for insufficient fund 150,000

A check drawn by the Vice President of the company

A check drawn by a supplier dated December 28, 2021

Petty cash fund of which Php 10,000 is in currency, Php 7,200

Cash Balance per Ledger Php 1,660,000

Petty cash fund 50,000

1. How much is the petty cash shortage or overage?

Tawiran Company reported cash account which consisted of the following:

Bond sinking fund 1,500,000

What total amount of cash should be reported under current assets?

Cash on hand 500,000

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

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