PROBLEM NO.

The accountant of Jigo Company is in the process of preparing the company’s financial statements for the
year ended December 31, 2021. He is trying to determine the correct balance of cash and cash equivalents
to be reported as a current asset in the statement of financial position. The following items are being
considered:
 The following accounts with respective balances are maintained at the JDB Bank:
Current Account #1 P 101,000
Current Account #2 (15,300)
Savings Account 68,600

 Checks received from customers awaiting deposit amounting to P31,500 of which a customer check
dated January 3, 2022 amounting to P4,500 has been included.

 Currency and coins on hand of P4,380.

 Savings accounts at the BDO:

a. Account #101 - P4,200,000. This account is being used to accumulate cash for future plant
expansion in 2022.
b. Account #102 – P3,500,000. This account has been maintained to pay off a long-term loan
which will be due in March 31, 2022. The total face amount of the loan amounts to
P3,000,000. The total amount to be settled will be determined on maturity date.

 Petty cash of P10,000 (currency of P5,200 and unreplenished vouchers for P4,800).

 P250,000 in a current account at the BDO. This represents a 20% compensating balance for
P600,000 loan with the bank. Jigo Company is not legally restricted to withdraw the funds until the
loan is due in 2021.

 Treasury Bills
a. Two-month maturity bills P86,000
b. Five-month bills 320,000

 Time Deposit (placement term is 6 months) P300,000

1. What total amount of cash and cash equivalents should be reported under the current assets?
PROBLEM NO. 2

The following information has been extracted from the accounting records of the Dansavanh Nam Ngum
Company at December 31, 2021:

 Cash on Hand P280,000

The following are included in cash on hand:

 A customer check for P26,000 returned by the bank on December 29, 2021. It was
redeposited and cleared the bank on January 5, 2022.
 A customer check for P35,000 dated January 2, 2022, received December 30, 2021.
 Money orders received from customers, P30,000.

 Kasikorn Bank Accounts:

o Savings account (the required minimum
Monthly Average Daily Balance is P15,000) 12,500
o Current account (8,500)

 364-day Treasury bills with maturity on March 1, 2022

purchased December 15, 2021 250,000

 Petty Cash Fund 20,000

The petty cash fund consists of the following:

Currency and coins P13,500
IOUs from officers and employees 3,000
Unreplenished petty cash disbursements 1,500
Currency in envelope with the notation:
“We were Mr. Lim’s coworker. Words may
not be adequate to express how sorry we feel.
Please accept our heartfelt sympathies on the
loss of your loved one.” 1,500
Total P20,000

 Maybank bank current account 218,000

The following information pertains to Maybank Bank current account:

 A check for P13,000 was dated and recorded on December 29, 2021, but was delivered to
payee on January 5, 2022.
 A check for P15,000 dated January 10, 2022, payable to a supplier was recorded and
released to payee on December 19, 2021. Maybank Bank requires current account
depositors to maintain a monthly average daily balance of P50,000.

 Time deposit placements:

Date Term
Dec. 15, 2021 30 days 10,000
Aug. 31, 2021 120 days 25,000
Nov. 30, 2021 180 days 55,000

 Employee Travel advances 7,000

 Cash in bond sinking fund 500,000

 Customer’s note receivable 45,000

 Postage stamps 2,400

2. What total amount should be recorded as cash and cash equivalents on December 31, 2021?
PROBLEM NO. 3

Claire is reviewing the cash accounting for GDC, Inc. Claire’s review will focus on the petty cash fund
account and bank reconciliation for the month ended May 31, 2021. She has collected the following
information from GDC’s bookkeeper for this task.

PETTY CASH FUND

 The petty cash fund was established on May 2, 2021, in the amount of P10,000.
 Expenditures from the fund by the custodian as of May 31, 2021, were evidenced by approved petty
cash vouchers for the following:
Various office supplies P4,235
IOU from employees 1,100
Shipping charges 2,548
Miscellaneous expense 1,025
 On May 31, 2021, the petty cash fund was replenished and increased to P12,000; currency and
coins in the fund at that time totaled P602.

BANK RECONCILIATION
CITIBank
Bank Statement

Disbursement Receipts Balance

Balance, May 1, 2021 P350,760
Deposits P1,120,000
Note payment direct from customer
(interest of P1,200) 37,200
Checks cleared during May P1,246,000
Bank service charges 1,080
Balance, May 31, 2021 260,880

GDC, Inc.’s Cash Account

Balance, May 1, 2021 P354,000
Deposits during May 2021 1,240,000
Checks written during May 2021 1,273,400

Deposits in transit are determined to be P120,000, and checks outstanding at May 31 total P34,000. Cash
on hand (besides petty cash) at May 31, 2021, is P9,840.

3. What is the amount of petty cash shortage?

4. What amount of cash should be reported in the May 31, 2021, statement of financial position?
PROBLEM 4

On January 15, 2021, you started the audit of the financial statements of the Mood Company for the year
ended December 31, 2020. From your investigation, you discovered the following:

1. The bookkeeper also acts as the cashier. On December 31, 2020, the bookkeeper’s year-end cash
reconciliation contains the following items.
Cash per ledger, 12-31-20 P491,200
Cash per bank, 12-31-20 518,800
Outstanding checks 41,760
Mood Co. check charge by bank in error
12-20-20; corrected by bank on 1-5-21 1,200
Cash in transit, credited by bank on 1-2-21 5,760

2. The cash account balances per ledger as of 12-31-20 were: Cash - P491,200; petty cash - P1,200

3. The count of the cash on hand at the close of business on January 15, 2021, including the petty cash,
was as follows:
Currency and coin P3,080
Expense vouchers 160
Employees’ IOU’s dated 1-5-21 440
Customers’ checks in payment of account 2,320
P6,000

4. From January 2, 2021 to January 15, 2021, the date of your cash count, total cash receipts appearing in
the cash records were P68,800. According to the bank statement for the period from January 2, 2021
to January 15, 2021, total credits were P60,800.

5. On July 5, 2020, cash of P3,200 was received from an account customer; the Allowance for Doubtful
Accounts was charged and Accounts Receivable credited.

6. On December 5, 2020, cash of P2,400 was received from an account customer; Inventory was charged
and Accounts Receivable credited.

7. Cash of P5,840 received during 2020 was not recorded.

8. Checks received from customers from January 2, 2021 to January 15, 2021, totaling P3,360, were not
recorded but were deposited in bank.

9. On July 1, 2020, the bank refunded interest of P160 because a note of the Mood Company was paid
before maturity. No entry had been made for the refund.

10. In the cashier’s petty cash, there were receipts for collections from customers on January 9, 2021,
totaling P6,800; these were unrecorded and undeposited.

11. In the outstanding checks, there is one for P400 made payable to a trade creditor; investigation shows
that this check had been returned by the creditor on June 14, 2020 and a new check for P800 was
issued in its place; the original check for P400 was made in error as to amount.

Based on the above and the result of your audit, answer the following:

5. Correct bank balance as of December 31, 2020 is P484,400

6. Cash shortage as of December 31, 2020 is P18,800

7. Cash shortage for the period January 1 to 15, 2021 is P20,320

PROBLEM 5

The trial balance of Kaya Koto Company at December 31, 2021 includes the following accounts:

Petty Cash Fund P 5,000

Cash on Hand 19,700
Metrobank, Current Account 110,200
Allied Bank, General Account 162,000
Allied Bank, Payroll Account (credit balance) 4,000
Security Bank, Savings Account 65,000

Additional information are as follows:

a. The petty cash fund consisted of the following items as of December 31, 2021:
 Currency and coins, P1,490
 Employees' advances, with no supporting vouchers, P880
 Currency in an envelope marked “collections for charity” with employees’ names and
signatures attached, P160
 Unreplenished petty cash vouchers, P740
 Replenishment check drawn by Kaya Koto payable to the petty cash cashier representing
her salary, P1,830

b. Cash on hand includes the following items:

 Customer's check for P5,000 returned by bank on December 26, 2021 marked “Refer to
Drawer”
 Postal money orders received from customers, P2,800
 Manager's check for P1,500 dated January 10, 2022 received December 23, 2021.

c. Included among the checks drawn by Kaya Koto against the Metrobank current account and
recorded in December 2021 are the following:
 Check #1214 written and dated December 23, 2021 and delivered to payee on January 3,
 2022, P2,500
 Check #1219 written December 26, 2021, dated January 30, 2022, delivered to payee on
December 28, 2021, P4,300

d. The credit balance in Allied Bank payroll account represents checks drawn in excess of the
deposit balance which are still outstanding at December 31, 2021. There is no legal right of offset
exists in the agreement between Allied Bank and its depositors.

e. The savings account deposit in Security Bank was set aside by the Board of Directors for the
acquisition of new equipment. This amount is expected to be disbursed in January 2022.

Based on the above data, compute the following:

8. The adjusted cash in bank as of December 31, 2021 279,000

9. The correct amount of cash as of December 31, 2021 295,520

PROBLEM 6

The December 31, 2021 bank statement for CBA Corp. showed a P190,925 balance. In
reviewing the bank reconciliation statement prepared by the client’s personnel, the following
information is discovered:

a. Cash on hand for undeposited sales receipts, December 31, 2021, P13,025.
b. Customer's NSF check returned with bank statement, P42,040.
c. Cash sales of P64,025 for the week ended December 18, 2021 were recorded on the books.
The cashier reports this amount missing, and it was not deposited in the bank.
d. Note receivable of P250,000 and interest of P2,500 was collected by the bank and not
recorded on the books.
e. Deposit in transit December 31, 2021, P35,000.
f. A customer's check for P29,040 in payment of its account was recorded on the books at
P94,020.
g. Outstanding checks, P204,055. Includes a duplicate check of P7,085 to J. Blue, who notified
CBA that the original was lost. CBA stopped payment on the original check and has already
adjusted the cash account in its accounting records for this amount.
h. The cash account includes petty cash fund in the amount of P5,000. When the fund is counted
on December 31, it was found to include paid petty cash vouchers totaling P1,800.

10. Based on the above information, the cash balance per books before adjustment as of
December 31, 2021 should be: (32,560)