Practice Test: Cash and cash equivalent

Tranvia Company had the following balances on December 31, 2018:

Cash in checking account 350,000

Cash in money market account 750,000
Treasury bill, purchased November 1, 2018 maturing January 31, 2019 3,500,000
Time deposit purchased December 1, 2018 maturing March 31, 2019 4,000,000

What amount should be reported as cash and cash equivalents on December 31, 2018?

Pygmalion Company had the following balances on December 31, 2018:

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 2019 3,000,000
Time deposit, purchased December 15, 2018 and due March 15, 2019 2,000,000

The cash on hand included a P200,000 check payable to Pygmalion, dated January 15, 2019

What total amount should be reported as cash and cash equivalents on December 31?

Thor Company provided the following data on December 31, 2018

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, 2018 but not mailed until January 15, 2019 500,000
Cash in sinking fund 2,000,000

On December 31, 2018, what amount should be reported as “cash” under current assets?
At year-end, Myra Company reported cash and cash equivalents which comprised 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?

Everlast Company reported the following information at year-end:

 Share investments of P1,000,000 that are very actively traded in the stock market.
 Government treasury bills of P2,000,000 with a 10-year term but purchased on December 31
at which time they had two months to go until maturity.
 Cash of P3,400,000 in the form of coin, currency, saving account and checking account.
 Commercial papers of P1,500,000 with term of nine months but purchased on December 31
at which time they had three months to go until maturity

What total amount should be reported as cash?

Everlast Company reported the following information at year-end:

 Share investments of P1,000,000 that are very actively traded in the stock market.
 Government treasury bills of P2,000,000 with a 10-year term but purchased on December 31
at which time they had two months to go until maturity.
 Cash of P3,400,000 in the form of coin, currency, saving account and checking account.
 Commercial papers of P1,500,000 with term of nine months but purchased on December 31
at which time they had three months to go until maturity

What total amount should be reported as cash equivalents?

Burr Company had the following account balances at year-end:

Cash in bank 2,250,000

Cash on hand 125,000
Cash restricted for addition to plant and expected to be disbursed next year 1,600,000

Cash in bank included P600,000 of compensating balance against short-term borrowing agreement.
The compensating balance is not legally restricted as to withdrawal.

What total amount of cash should be reported under current assets at year-end?

On December 31, 2018, West Company had the following cash balances:

Cash in bank – current account 1,800,000

Petty cash fund – all funds were reimbursed at year-end 50,000
Time deposit due February 1, 2019 250,000
Time deposit in bank closed by BSP 1,000,000

Cash in bank included P600,000 of compensating balance against short-term borrowing agreement on
December 31, 2018. The compensating balance is legally restricted as to withdrawal.

On December 31, 2018, what total amount should be reported as cash and cash equivalents?

Ral Company reported the checkbook balance on December 31,2018 at P5,000 and held the following
items on same date:

Check payable to Ral, dated January 2, 2019 in payment of a sale made in December
2018, not included in December 31 checkbook balance 2,000,000
Check payable to Ral, deposited December 15 and included in December 31
checkbook balance, but returned by bank on December 30 stamped
“NSF”. The check was redeposited on January 2, 2019 and cleared on
January 9, 2019 500,000
Check drawn on Ral’s account, payable to a vendor, dated and recorded in Ral’s
books on December 31, 2018 but not mailed until January 10, 2019 300,000
Certificate of time deposit 1,000,000

What amount should be reported as cash on December 31, 2018?

Timex Company reported petty cash fund which comprised the following:

Coins and currency 3,300

Paid vouchers:
Transportation 600
Gasoline 400
Office supplies 300
Postage stamps 300
Due from employees 1,200 3,000
Manager’s check returned by bank marked “NSF” 1,000
Check drawn by the entity to the order of petty cash custodian 2,700

What is the correct amount of petty cash fund for statement presentation purposes?

Liwanag Company reported an imprest petty cash fund of P50,000 with the following details:

Currencies 20,000
Coins 2,000
Petty cash vouchers:
Gasoline payments for delivery equipment 3,000
Medical supplies for employees 1,000
Repairs of office equipment 1,500
Loan to employees 3,500
A check drawn by the entity payable to the order of Grace de la Cruz, petty cash
custodian, representing her salary 15,000
An employee check returned by the bank for insufficiency of fund 3,000
A sheet of paper with names of several employees together with contribution for a
birthday gift of a com-employee.
Attached to the sheet of paper is a currency of 5,000

What amount of petty cash fund should be reported in the statement of financial position?
Campbell Company had the following account balances on December 31, 2018:

Petty cash fund 50,000

Cash in bank – current account 4,000,000
Cash in bank – payroll account 1,200,000
Cash in bank – sinking fund 2,000,000
Cash on hand 500,000
Cash in bank – restricted account for plant addition and expected to be
disbursed in 2019 1,500,000
Treasury bills 1,000,000

The petty cash fund included unreplenished December 2018 petty cash expense vouchers P5,000 and
employee IOU P5,000.

The cash on hand included a P100,000 customer check payable to Campbell dated January 15, 2019.

In exchange for a guaranteed line of credit, the entity has agreed to maintain a minimum balance of
P200,000 in the unrestricted current bank account.

The sinking fund is set aside to settle a bond payable that is due on June 30, 2019.

What total amount should be reported as cash and cash equivalents on December 31, 2018?

Yasmin Company provided the following information on December 31, 2018:

Petty cash fund 50,000

Current account – First Bank 4,000,000
Current account- Second Bank (overdraft) (250,000)
Money market placement – Third Bank 1,000,000
Time deposit – Fourth Bank 2,000,000

A check for P100,000 was drawn against First Bank current account dated and recorded December 29,
2018 but delivered to payee on January 15, 2019.

The Fourth Bank time deposit is set aside for land acquisition in early 2019.

What total amount should be reported as cash and cash equivalents on December 31, 2018?
Karla Company provided the following information on December 31, 2018:

Cash on hand 500,000

Security Bank current account 1,000,000
PNB Current account No. 1 400,000
PNB current account NO. 2 (overdraft) (50,000)
BSP treasury bill – 60 days 3,000,000

The cash on hand included a customer postdated check of P100,000 and postal money order of
P40,000.

A check for P200,000 in payment of account was drawn against Security Bank account, dated January
15, 2019, delivered to the payee and recorded December 31, 2018.

What total amount of cash and equivalents should be reported on December 31, 2018?

On December 31, 2018, Erika Company reported cash account balance per ledger of P9,500,000 which
included the following:

Cash in bank – demand deposit 3,000,000

Time deposit – 30 days 500,000
NSF check of customer 200,000
Money market placement due on June 30, 2019 2,000,000
Saving deposit 1,000,000
IOU from an employee 300,000
Pension fund 1,500,000
Customer check dated January 31, 2019 600,000
Customer check outstanding for 18 months 400,000
9, 500,000

Check of P100,000 in payment of accounts payable was dated and recorded on December 31, 2018
but mailed to creditors on January 15, 2019.

Check of P300,000 dated January 31, 2019 in payment of accounts payable was recorded and mailed
December 31, 2018

The cash receipts journal was held open until January 15, 2019, during which time P200,000 was
collected and recorded on December 31, 2018.

What total amount should be reported as cash and cash equivalents on December 31, 2018.
On December 31, 2018, Roma Company reported cash of P9,950,000 with the following details:

Undeposited collections 600,000

Cash in bank – BDO checking account 4,000,000
Undeposited check from a customer, dated January 15, 2019 150,000
Cash in bank – BDO fund for payroll 1,000,000
Cash in bank – BDO money market instrument, 90 days 2,000,000
Cash in foreign bank restricted 1,500,000
Cash in bank – BDO value added tax account 450,000
9,950,000

On December 31, 2018, what total amount should be reported as cash and cash equivalents?

Love Company reported the following information in relation to cash on December 31, 2018:

 Checkbook balance, P4,000,000.

 Undeposited collections, P400,000.
 A customer check amounting to P200,000 dated January 2, 2019 was included in the
December 31, 2018 checkbook balance.
 Another customer check for P500,000 deposited on December 22, 2018 was included in the
checkbook balance but returned by the bank for insufficiency of fund.
This check was redeposited on December 26, 2018 and cleared two days later.
 A P400,000 check payable to supplier dated and recorded on December 30, 2018 was mailed
on January 16, 2019.
 A petty cash fund of P50,000 comprised the following on December 31, 2018:
Coins and currencies 5,000000000000
Petty cash vouchers 40,000000000000
Refundable deposit for returnable containers 5,000000000000
50,000000000000

 A check of P40,000 was drawn on December 31, 2018 payable to Petty Cash.

What is the adjusted cash in bank on December 31, 2018?

Love Company reported the following information in relation to cash on December 31, 2018:

 Checkbook balance, P4,000,000.

 Undeposited collections, P400,000.
 A customer check amounting to P200,000 dated January 2, 2019 was included in the
December 31, 2018 checkbook balance.
 Another customer check for P500,000 deposited on December 22, 2018 was included in the
checkbook balance but returned by the bank for insufficiency of fund.
This check was redeposited on December 26, 2018 and cleared two days later.
 A P400,000 check payable to supplier dated and recorded on December 30, 2018 was mailed
on January 16, 2019.
 A petty cash fund of P50,000 comprised the following on December 31, 2018:
Coins and currencies 5,000000000000
Petty cash vouchers 40,000000000000
Refundable deposit for returnable containers 5,000000000000
50,000000000000

 A check of P40,000 was drawn on December 31, 2018 payable to Petty Cash.

What total amount should be reported as cash on December 31, 2018?

In preparing the bank reconciliation for the month of August, Apex company provided the following
information:

Balance per bank statement 1,805,000

Deposit in transit 325,000
Return of customer check for insufficient fund 60,000
Outstanding checks 275,000
Bank service charge for August 10,000

What is the adjusted cash balance?

In preparing the bank reconciliation for the month of December, Case Company provided the
following data:

Balance per bank statement 3,800,000

Deposit in transit 520,000
Amount erroneously credited by bank to Case’s account 40,000
Bank service charge for December 5,000
NSF check 50,000
Outstanding checks 675,000

What is the adjusted cash in bank?

What is the unadjusted cash in bank balance per book?

Core Company provided the following data for the purpose of reconciling the cash balance per book
with the balance per bank statement on December 31:

Balance per book 850,000

Balance per bank statement 2,000,000
Outstanding checks, including certified check of P100,000 500,000
Deposit in transit 200,000
December NSF checks (of which P50,000 had been redeposited and
cleared on December 27) 150,000
Erroneous credit to Core’s account, representing proceeds of loan
granted to another company 300,000
Proceeds of note collected by bank for Core, net of service charge of P20,000 750,000

What amount should be reported as cash in bank at year-end?

Able Company received the bank statement for the month of March.
However, the closing balance of the account was unreadable.

Attempts to contact the bank after hours did not secure the desired information.

February 28 book balance 1,460,000

Note collected by bank 100,000
Interest earned on note 10,000
NSF check of customer 130,000
Bank service charge on NSF check 2,000
Other bank service charges 3,000
Outstanding checks 200,000
Deposit of February 28 placed in night depository 85,000
Check issued by Axle Company charged to Able’s account 20,000

What is the cash balance per bank statement?

Stellar Company provided the bank statement for the month of December which included the
following information:

Ending balance, December 31 2,800,000

Bank service charge for December 12,000
Interest paid by bank to Stellar Company for December 10,000

In comparing the bank statement to its own cash records, the entity found the following:

Deposits made but not yet recorded by the bank 350,000

Checks written and mailed but not yet recorded by the bank 650,000

In addition, the entity discovered that it had drawn and erroneously recorded a check for P46,000
that should have been recorded for P64,000.

What is the cash balance per ledger on December 31?

Letty Company provided the bank statement for the month of April which included the following
information:

Bank service charge for April 15,000

Check deposited by Letty during April was not collectible and has
been marked “NSF” by the bank 40,000

In comparing the bank statement to its own records, the entity found the following:

Deposits made but not yet recorded by bank 130,000

Checks written and mailed but not yet recorded by bank 100,000

All deposits in transit and outstanding checks have been properly recorded in the entity’s books.

A customer check for P35,000 payable to Letty Company had not yet been deposited and had not
been recorded by the entity.

The cash in bank account balance per ledger is P920,000.

What is the adjusted cash in bank on April 30?

Gallant Company showed a cash account balance of P4,500,000 at the month-end.

The bank statement did not include a deposit of P230,000 made on the last day of the month.

The bank statement showed a collection by the bank of P94,000 for the depositor and a customer
check for P32,000 returned because it was NSF.

A customer check for P45,000 was recorded by the depositor as P54,000, and a check written for
P79,000 was recorded as P97,000.

What amount should be reported as cash in bank?

Aries Company kept all cash in a checking account. An examination of the accounting records and
bank statement for the month of June revealed the following information:
 The cash balance per book on June 30 was P8,500,000.
 A deposit of P1,000,000 that was placed in the bank’s night depository on June 30 did not
appear on the bank statement.
 The bank statement showed that on June 30 the bank collected note for the entity and
credited the proceeds of P950,000 to the entity’s account, net of collection charge P50,000.
 Checks outstanding on June 30 amounted to P300,000 including certified check of P100,000.
 The entity discovered that a check written in June for P200,000 in payment of an account
payable had been recorded in the entity’s records as P20,000.
 Included with the June bank statement was NSF check for P250,000 received from a customer
on June 26.
 The bank statement showed a P20,000 service charge for June.

What amount should be reported as cash in bank on June 30?

What is the balance per bank statement on June 30?
What is the net adjustment to cash in bank on June 30?

Pearl Company maintains a checking account at the City Bank. The bank provides a bank statement
along with canceled checks on the last day of each month. The July bank statement included in the
following information:

Balance, July 1 550,000_______________

Deposits 1,800,000_______________
Checks processed 1,400,000_______________
Service charge 30,000_______________
NSF check 120,000_______________
Monthly loan payment deducted by bank from account 100,000_______________

Deposits outstanding totaled P100,000 and all checks written by the entity were processed by the
bank except for check of P150,000.

A P200,000 July deposit from a credit customer was recorded as P20,000 debit to cash and credit to
accounts receivable.

A check correctly recorded by the entity as P30,000 disbursement was incorrectly processed by the
bank as P300,000 disbursement.

What is the balance per bank on July 31?

What is the adjusted cash in bank on July 31?
What is the cash in bank balance per ledger on July 31?
Boracay Company kept all cash in a checking account. An examination of the bank statement for the
month of December revealed a bank statement balance of P8,470,000.

A deposit of P950,000 placed in the bank’s night depository on December 29 does not appear on the
bank statement.

Checks outstanding on December 31 amount to P270,000.

The bank statement showed that on December 25 the bank collected a note for Boracay Company
and credited the proceeds of P935,000 to the entity’s account which included P35,000 interest.

Boracay Company discovered that a check written in December for P183,000 in payment of an
account had been recorded as P138,000.

Included with the December 31 bank statement was an NSF check for P250,000 that Boracay
Company had received from a customer on December 20.

The bank statement showed a P15,000 service charge for December.

What is the adjusted cash in bank on December 31?

What is the unadjusted balance per book on December 31?
What is the net adjustment to cash in bank on December 31?
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