Problem 8-1 CASH AND CASH EQUIVALENTS (GACUTNO)

Traveler's Check ₱50,000

Postal money order 30,000
Petty Cash Fund 4,000
Treasury bills, due 3/31/2019 (purchased 12/31/2018) 200,000
Current account at Metrobank 2,000,000
Payroll account 500,000
Treasury warrants 300,000
Total cash and cash equivalents ₱3,084,000
Answer: A

Problem 8-2 (Cabalquinto)

Reported cash & cash equivalents 6,325,000

Certificate of deposits-120 days maturity -500,000
Postdated check -125,000
Maintaining balance- legally restricted -500,000
Adjusted cash & cash equivalent 5,200,000

PROBLEM 8-3 (Purugganan)

Bills and coins on hand PHP 52,780.00

Traveler's check 22,400.00
Petty cash 350.00
Money order 800.00
Checking account balance in BPI 22,000.00
Cash and Cash Equivalents 12/31/18 PHP 98,330.00

Problem 8-4
(Locsin)

Cash on Hand P 80,000

Checking account No. 143 -
BPI 200,000
Checking account No. 155 -
BPI (30,000)
Securities classified as cash equivalents 3,600,000
Cash and Cash Equivalent P 3,850,000

Securities classified as cash equivalent;

Securities Date Acquired Maturity Date Amount
120 - day Certificate of Deposit 10/12/2018 31/01/2019 600,000
BSP - Treasury Bills (No.2) 31/10/2018 20/01/2019 1,000,000
Money Market Funds 21/11/2018 10/02/2019 2,000,000
PROBLEM 8-5 CASH AND CASH EQUIVALENTS (ELLORIMO)

Bank cheque account ₱58,400

Bank savings account (collectible immediately) 23,440
Cash 10,000
Treasury bonds-maturing 2 months 8,500
Cash and cash equivalents ₱100,340
Answer: B

Problem 8-6 (Orca)

Petty Cash Fund ₱ 70,000

Less: Unreplenished expense voucher 15000
Employee's Check 5000 -20000
₱ 50,000
Current account- Metrobank 4000000
Company's Post-dated check 100000
Cash and Cash Equivalent ₱ 4,150,000

Problem 8-7 (Delos Reyes)

1) C
Let X = Principal Amount

Principal X
Less: Compensating Balance 5%X
Add: Current Balance 50,000
Amount needed ₱ 3,375,000.00

X.05X + 50,000 = 3,375,000

.95X = 3,375,000-50,000
.95X/.95 = 3,325,000/.95
X = 3,500,000

2) C
Annual interest payment 420,000
(3,500,000 x 12%)
Interest income on the loan proceeds in the compensating
balance
[(3,500,000 - 3,375,000) x 4%] 5,000
Net interest 415,000
Divide by loan proceeds
(3,500,000-175,000) 3,375,000
Effective interest rate 12.30%
PROBLEM 8-8 Petty Cash Fund (Meana)

Requirement No. 1

Currencies 3,000
Coins 450
A check drawn by the company payable to the order
of the petty cash custodian, representing her salary 3,800
Adjusted Petty Cash Fund 7,250

Requirement No. 2: Adjusting Entries

Debit Credit
1) Transportation expense 650
Office supplies expense 160
Repairs expense 400
Advances to employees 600
Miscellaneous expense 240
Postage 200
Petty Cash fund 2,250
2) Unused stamps 50
Postage 50
3) Petty cash fund 700
Miscellaneous Income 700
4) Advances to employees 1,200
Petty cash fund 1,200

Requirement No. 3

Currencies 3,000
Coins 450
Petty cash vouchers:
Transportation 650
Office supplies 160
Repair of computer 400
Loans to employees 600
Miscellaneous expenses 240
Postage 200
A check drawn by the company payable to the
order of the petty cash custodian, representing her 3,800
salary
An employee’s check returned by the bank because 1,200
of insufficient funds
A piece of paper with names of several employees
together with a contribution for a wedding gift for
an employee. Attached to the sheet of paper is a 500 11,200
currency of
Less: Petty Cash Accountabilities 10,000
PCF imprest balance
A piece of paper with names of several employees
together with a contribution for a wedding gift
for an employee. Attached to the sheet of paper 500 10,500
is a currency of
Petty cash overage 700
Problem 8-9 Petty Cash Fund (Duarte)
Required: Compute the amount of cash shortage.
Petty Cash Count Sheet
January 3, 2018; 8:30AM

Denomonation Quantity Total

Bills 500 3 1,500.00
100 5 500.00
20 20 400.00
10 12 120.00
Coins 1 50 50.00
0.25 60 15.00
Total Bills and Coins 2,585.00

Checks for Deposits:

Maker Date Payee Amount
Al, Beautician 26/12/2018 Cash 5,000.00
Rex, Hairdresser 19/12/2018 Raymund 6,100.00
Zev, customer 29/12/2018 Raymund 6,500.00
Total Checks for deposit 17,600.00

I.O.U's Date Amount

Rhad, employee 20/12/2018 50.00
Andrix 23/12/2018 100.00
Total I.O.U's 150.00

Vouchers
Date Particulars Amount
12/15/18 Transportation 65.00
12/16/18 Office Supplies 70.00
12/17/18 Xerox fees 80.00
12/18/18 Postage 150.00
1/2/19 Newspaper 10.00
1/2/19 Freight Charges 50.00
Total Vouchers 425.00

Sales Invoice
Date Invoices Amount
12/30/18 #143 4,000.00
12/31/18 #144 5,100.00
1/2/19 #145 3,050.00
Total Invoice 12,150.00
Bills and Coins 2,585.00
Checks for deposit 17,600.00
I.O.U's 150.00
Vouchers paid 425.00
Total Petty Cash Accounted 20,760.00
Less: Petty Cash Accountabilities Cash Collections 12,150.00
PC Fund Ledger Balance 5,000.00
Check collection from customer 6,500.00
Petty Cash Overage (2,890.00)

Problem 8-10 (BONABON)

Bank Book

Unadjusted balance 10,094 8,228

Erroneous bank -
credit 500

DIT: November 3,600

-
OC: November 2,628

Credit memo:
October 1,600
November 750
Debit memo:
NSF: November - 665
BSC: October - 20
November - 22
- 35
Check No. 148 1,000
Check No. 150 - 270

Adjusted balance 10,566 10,566

1. B
2. A
3. B
18, 269 + 750 = 19, 019
4. D
5. A
Cash in bank 1,600
Notes
receivable 1,000
Interest income 600

Cash in bank 750

Interest income 750

Accounts receivable 665

Cash in bank 665

Bank service charge 42

Cash in bank 42

Rent expense 35
Cash in bank 35

Cash in bank 1,000

Equipment 1,000

Advertising expense 270

Cash in bank 270

PROBLEM 8-11 : Deposit in Transit (Deza)

Deposit in transit, beg. 50,000

Add: Book debits for the month 400,000
Less: CM recorded this month 5,000
Error - check received (January) 36,000
Error - check issued (January) 27,000
Add: Error - check received (February) 16,000 348,000
Total 398,000
Less: Bank debits for this month 360,000
Less: CM for this month 6,000
Erroneous bank credit - February 2,500
Erroneous bank charge - January 1,000 350,500
Deposit in transit, end. 47,500
Problem 8-12 (Castillo)
Outstanding Checks, Beg. 12,880 (SQUEEZE)
Add: Book Credits 85,800
Less: Error (1,800)
Service Charge (30) 83,970
Total 96,850
Less: Bank Debits 97,650
Less: DAIF Check returned (2,300)
DM for this month (3,000) 92,350
Outstanding Checks, End 4,500

Problem 8-13 (Vargas)

Outstanding checks, beginning ₱50,000

Add: Checks issued by the company this month 1,250,000
Total checks to be paid by the bank 1,300,000
Less: Checks paid by the bank this month 1,100,000
Outstanding checks, end ₱200,000

Deposit in transit, beginning ₱150,000

Add: Deposit made by the company this monoth 900,000
Total deposits to be acknowledged by the bank 1,050,000
Less: Deposit acknowledged by the bank this month 800,000
Deposit in transit, ending ₱250,000

May-31 Receipts Disbursements Jun-30

Unadjusted balances - book 1,095,000 1,200,000 1,250,000 1,045,000

- -
Bank service charge - May 31 5,000 5,000
-
Service charges recorded - June 30 25,000 25,000
-
CM for collection of note - May 31 300,000 300,000

CM for collection by bank - June 30 275,000 275,000

-
NSF checks - June 30 50,000 50,000
Adjusted balances ₱1,390,000 ₱1,175,000 ₱1,325,000 ₱1,240,000
PROBLEM 8-14 (Villalon)
JUNE
31-May Cash Receipts Cash Disbursement 30-Jun

Unadjusted Book Balance 1,251,000 1,300,000 1,500,000 1,051,000

NSF- debit Memo (110,000) (110,000)

75,000 (75,000)

Collections- credit memo 125,000 (125,000)

150,000 150,000

Error- Understated check deposit 9,000 (9,000)

21,000-12,000

Adjusted Book Balance 1,275,000 1,316,000 1,465,000 1,126,000

Outstanding checks, beg. 150,000

Checks issued

book disbursement 1,500,000

DM last month (110,000) 1,390,000

Total 1,540,000
Checks paid by bank

Bank disbursement 1,300,000

DM this month 75,000

Error bank charge- june 30,000

Error bank credit- may 45,000 (1,150,000)

Outstanding Checks, end 390,000

JUNE
31-May Cash Receipts Cash Disbursement 30-Jun

Unadjusted bank Balance 1,250,000 1,400,000 1,300,000 1,350,000

OC (150,000) (150,000)

390,000 (390,000)

DIT 200,000 (200,000)

153,000 153,000
Error bank charge

may 20,000 (20,000)

june (30,000) 30,000

Error bank credit

may (45,000) (45,000)

june (17,000) (17,000)

Adjusted Book Balance 1,275,000 1,316,000 1,465,000 1,126,000

1 C
2 D
3 C
4 D
5 A
6 D
PROBLEM 8-15 PROOF OF CASH (Marquez)
Question No. 1

Beginning Balance, July 1 P 128,384

Add: Cash Receipts (July) 1,364,858
Cash Receipts (August) 1,839,744
Total P 3,332,986
Less: Cash Disbursements (July) 1,330,882
Cash Disbursements (August) 1,712,892
Bank reconciliation item 750
Unadjusted Balance P 288,462

ANS. A

Question No. 2
Outstanding check, Aug. 31 P 67,122
Add: Checks paid by the bank
Bank debits except service P 1,702,830
charge
Less: Erroneous bank charge 1,166
Debit memo 4,950 1,696,714
Total P 1,763,836
Less: Checks issued by the
company this August 1,712,982
Outstanding check, July 31 P 50,944

ANS. C

Questions No. 3-5

BANK July 31 Cash Receipts Cash August 31
Disbursements
Unadjusted Balances 180,250 1,830,752 *1,702,918 308,084
Outstanding checks
July 31 (50,944) (50,944)
August 31 67,122 (67,122)
Deposit in transit
July 31 32,844 (32,844)
August 31
Erroneous bank charge - - (1,166) 1,166
Adjusted Balances 162,150 1,839,744 1,717,930 283,964

*Checks-plus debit memos 1,702,830

Service charge-new checks 88
Total 1,702,918
BOOK July 31 Cash Receipts Cash August 31
Disbursements
Unadjusted Balances P162,360 P1,839,744 **P1,713,642 P288,462
Error in recording 540 540
check no. 216 taken up
as P1,930 but should
be P1,390
Debit memo for 4,950 (4,950)
interest on note
Bank service charge
July 31 (52) (52)
August 31 88 (88)
NSF for July 31 (698) (698)
Adjusted Balances P162,150 P1,839,744 P1,717,930 P283,964

**Checks issued P1,712,892

Bank Reconciliation, 8/1 750
Total P1,713,642

ANS. 3.) A
4.) B
5.) A

Problem 8-16 (Quia) Proof of Cash

Disbursement Adjusted
Beginning Balance Receipts s Balance

Balance per Bank 69,000.00 171,500.00 113,000.00 127,500.00

Deposit In Transit

30-Nov 11,000.00 (11,000.00) -

31-Dec 20,000.00 20,000.00

Outstanding Check
30-Nov (7,000.00) (7,000.00) -
31-Dec 21,500.00 (21,500.00)
Errors

(500.00) (500.00) -
NSF check not
recorded (40,000.00) (40,000.00) -
Adjusted Balance 73,000.00 140,000.00 87,000.00 126,000.00
Beginning Adjusted
Balance Receipts Disbursements Balance

Balance per Book 66,000.00 113,800.00 85,000.00 94,800.00

Credit Memo

30-Nov 8,800.00 (8,800.00) -

31-Dec 35,000.00 35,000.00

Debit Memo

30-Nov (1,800.00) (1,800.00)

31-Dec 2,000.00 (2,000.00)
Adjusted Balance 73,000.00 140,000.00 87,000.00 126,000.00
3 4

Outstanding check, beg 7,000.00

Check
issued 75,000.00

Total 82,000.00

Less: Cleared Checks 113,000.00

Less: Debit Memo
NSF Check

08-Dec 10,000.00

19-Dec 40,000.00 50,000.00

Bank Service Charge 2,000.00

Error 500.00 60,500.00

Outstanding check, end 21,500.00 1

Bank to Book
Bank Receipts, beg 171,500.00
Add: Deposit In Transit

30-Nov (11,000.00)
31-Dec 20,000.00 9,000.00
Less:
Error Correction (500.00)

NSF Check (40,000.00)

Bank Receipts, end 140,000.00 2

Bank Balance, end 126,000.00

Book Balance, end 126,000.00
Cash Short or Over - 5
PROBLEM 8-17 Proof of Cash (Dela Cruz)
1) Outstanding Cheks, Beginning 16,250
Add: Book Disbursement 128,750.00
Less: Debit Memo (2,500.00) (131,250)
Total 142,500
Less: Check paid by the bank 133,750.00
Eroneous Bank Charged (3,750.00) (130,000)
Outstanding Checks, Ending 12,500

2) Deposit in Transit, Beginning 12,500

Add: Deposit made by the Company 152,500
Total 165,000
Less: Deposit Acknowledge by the Bank (145,000)
Deposit End 20,000

3) Unadjusted Cash in Bank 37,500

Add: Under-footed Cash Receipts 2,500
Total 40,000
Less: Unrecorded Bank Service Charges (2,250)
(3,250 + 1,500 - 2,500)
Adjusted Cash in Bank 12/31/18 37,750

4) Bank Service charge in December Bank Statement 3,250

Less: Bank Service charge recorded in December 2,500.00
Bank Service charge recorded in November (1,500.00) (1,000)
Unrecorded Bank Service Charge 12/31/18 2,250

5) Unadjusted Cash in Bank 16,250

Less: Bank Service Charge in November (1,500)
Adjusted Cash in Bank, November 14,750

Unadjusted Cash in Bank, November 16,250 (squeeze)

Add: Book Receipts 150,000
Total 166,250
Less: Book Disbursement -128,750
Unadjusted Cash in Bank, December 37,500
Chapter 8: Cash and Cash Equvalent (Sta Ana)
December 31

B.
1. Outstanding Checks Beg. (Squeeze) 8000
Add: Check issued this month
Book
Disbursement 148,000
Less: DM recorded this month 2,500 145,500
Total 153,500
Less: Bank disbursement 150,000
NSF Rdeposited 3,000
DM for this month 1,500
Add: Paid out in currency 2,000 147,500
Outstanding Checks End. 6,000

BANK
Sept 30 Receipt Disbursement Oct 30
Unadjusted Balance - Bank 100,000 200,000 150,000 150,000
Undeposited Collection
September 30 5,000 (5,000)
October 31 7,000 7,000
Outstanding Checks End.
September 30 (8,000) (8,000)
October 31 6,000 (6,000)
Paid out in currency 2,000 2,000
A.
Adjusted Balance - Bank A 97,000 204,000 150,000 151000

Problem 8-19 (Alegre)

1.) A
Balance per bank statement ₱ 1,000,000.00
Add: Deposit In Transit 80,000.00
Deduct: Outstanding Check (60,000.00)
Adjusted Cash Balance (Acct. 143) ₱ 1,020,000.00

2.) A
Outstanding Check, Beg. (Acct. 544) ₱ 250,000.00
Add: Checks issued during the month (DM, previous
is deducted) 3,490,000.00
Total ₱ 3,740,000.00
Deduct: Checks paid by the bank this month (DM,
current is deducted) (1,880,000.00)
Outstanding Check, End (Acct. 544) ₱ 1,860,000.00
Add: Outstanding Check (Acct. 143) 60,000.00
Total Outstanding Check, 12/31/18 ₱ 1,920,000.00
3.) B
4.) B November 30 Receipts Disbursements December 31
₱ ₱
Unadjusted Bank Balance (Acct. 544) 2,200,000.00 ₱ 1,000,000.00 2,000,000.00 ₱ 1,200,000.00

Deposit In Transit
Nov. 30 90,000.00 (90,000.00)
Dec. 31 240,000.00 240,000.00
Outstanding Check
Nov. 30 (250,000.00) (250,000.00)
Dec. 31 1,860,000.00 (1,860,000.00)
Errors 20,000 (20,000.00)
₱
Adjusted Balances ₱ 2,060,000.00 1,130,000.00 ₱ 3,610,000.00 (₱ 420,000.00)

5.) C
Adjusted Balance (Acct. 143) ₱ 1,020,000.00
Adjusted Balance (Acct. 544) (420,000.00)
Total Adjusted Balance, 12/31/18 ₱ 600,000.00

Deposit In Transit, Beg. ₱ 90,000.00

Add: Book Deposits during the month
(CM, previous is deducted) 1,130,000.00
Total ₱ 1,220,000.00
Deduct: Bank Deposits during the month
(CM, current is deducted) (980,000.00)
Deposit In Transit, End ₱ 240,000.00

Problem 8-20 (Astoveza)

1.)
Account No. 143 Bank Book
Unadjusted balances 1,000,000 1,099,400
Deposit in Transit 80,000
Misplaced Check -20,000
Outstanding Check -60,000
Undelivered Check 15,000
Note charged by the bank - -74,400
Adjusted balance 1,020,000 1,020,000
2.)
Account No. 143 60,000
Account No. 144 1,860,000
Total outstanding check 1,920,000

3-4)

Beg Receipts Disbursement End

Unadjusted bank balance 2,200,000 1,000,000 2,000,000 1,200,000
DIT - last month 90,000 -90,000
DIT - this month 240,000 240,000
OC - last month -250,000 -250,000
-
OC - this month 1,860,000 1,860,000
Erroneous bank charge 20,000 -20,000
Adjusted balances 2,060,000 1,130,000 3,610,000 -420,000

5.)
Adjusted balances:
Account No. 143 1,020,000
Account No. 144 -420,000
Total adjusted balances 600,000

1.) A 2.) A 3.) B 4.) B 5.) C

Problem 8-21 (Valmonte)

Book

Previous Current
Receipts Disbursement
Month Month
Balance: 200,000 150,000 80,000 270,000
Credit Memo:
Previous Month 9,000 (9,000) - -
Current Month - 13,000 - 13,000
Debit Memo:
Previous Month (100) - (100) -
Current Month - - 150 (150)
Mutilated Check 700 - - 700
Company Check - (1,200) (1,200) -
Adjusted Balance 209,600 152,800 78,850 283,685
Bank

Previous Current Month

Receipts Disbursements
Month
Balance: 206,600 159,000 88,650 276,950
Deposit in Transit:
Previous Month
Current Month 10,000 (10,000) - -
- 11,000 - 11,000
Outstanding
Check:
(4,200) - (4,200) -
Previous Month
Current Month - - 1,800 (1,800)
Erroneous bank
credit - Jan (6,000) - (6,000) -
Erroneous bank
credit - Feb - (4,000) - (4,000)
Erroneous bank
charge - Jan 3,200 (3,200) - -
Erroneous bank
charge – Feb - - (1,400) 1,400
Adjusted Balance 209,600 152,800 78,850 283,550

Problem 8-22 (Serdena)

Bank Book

May 31, balance May 31, balance 242,310.50

Less: Outstanding Checks Less:
Unrecorded Notes with
421 8,434.00 interest 30,900.00

488 4,300.00 273,210.50

522 6,524.00 Adjusted Cash Balance (221,052.50)

992 9,551.50 Cash Shortage 52,158.00

995 4,577.00
996 5,961.00 (39,347.50)
Add: Undeposited
Receipts 35,000.00
Adjusted Cash Balance 221,052.50
Problem 8-23 (Gane)

Bank Book
Unadjusted Balance 42,400 46,500
Deposit in Transit 5,000
Outstanding Checks (11,500)
Debit Memo (100)
Credit Memo 900
Adjusted Balance 35,900 47,300
1. C 2. D
3. B
Adjusted Cash in Bank Balance (Cash Accounted
35,900
Cash in Bank (Cash Accountability) 47,300
Cash Shortage as of June 30 11,400

4. D
July Collections per Duplicate Receipts 18,800
Collected Duplicate Slips
Total Duplicate Slips 11,000
Undeposited Collections 5,000 6,000
Cash on Hand 12,800
Actual Cash on Hand 4,800
Cash as of July 1-15 8,000
5. D
Understatement of Cash in Bank per Book 900
(46,500- 45,600)
Overstatement of Cash in Bank per Bank 1,600
(42,400 - 44,000)
Understatement of Outstanding Checks 7,900
(11,500 - 3,600)
Overstatement of Undeposited Collections 100
(5,000 - 5,100)
Credit Memo 900
Cash Shortage 11,400
Problem 8-25 (Abines)

PROBLEM 8-24 (Bangga) Question No. 4

Question No. 1 Unadjusted bal. per books P 293,500

Deposit in transit, unadjusted bal. P 175,250 Add: Credit memo for note coll. 15,000

Less: Customer's Post-dated check 50,000 Unreleased check 14,750

Adjusted Deposit in transit P 125,250 Company's post-dated check 37,210

Total P 360 460

Question No. 2 Less: Customer s post-dated check (50,000)

OC, unadjusted balance P 246,760 Cash in bank per books bal. P 310,360

Less: Unreleased check (14,750) Less: Adjusted cash in bank balance 250,460

Company's post-dated check (37,210) Cash shortage (P60,000)

Adjusted Outstanding checks P 194,790

Question No. 3 Question No. 5

Unadjusted bal. per bank P 350,000 Unadjusted bal. per books P293,500

Add: Deposit in transit 125,250 Less: Adjusted cash in bank balance 250,460

Less: Outstanding checks (194,790) Net adjustments P 43,040

Erroneous bank credit (30,000)

Adjusted cash in bank bal. P 250,460

1. BANK

Unadjusted Balance 101,000

Less -9,000
Add: DIT 10,000
Adjusted Balance 102,000 B.

2 Accounts Payable
Ending 120,000 - Beginning
Payment 360,000 480,000 Purchases

4,800,000 4,800,000

or
Purchases 480,000
Less: Unpaid
(120,000)
Paid/Payments 360,000 A.

3 Merchandise Inventory
Beginning - 60,000 Ending
Purchases 480,000 420,000 COGS B.

480,000 480,000

4 100% Sales 560,000 C.

75% Less:COGS -120,000
25% GP 360,000

5 BOOK BANK
Beginning 240,000 101,000 Unadjusted
Collected 420,000
(9,000)
Paid 360,000 10,000 DIT
Loan Proceeds 200,000
Loan Paid
(140,000)
OPEX
(180,000)
Total 180,000 102,000 Adjusted Balance per Bank

6,400 Add: PCF

B. 71,600 Shortage
1. B. P102,000
2. A. P360,000
3. B. P420,000
4. C. 560,000
5. B. P71,600