BSA1ACash and Cash Equivalents for Discussion purposes PDF

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Problem 1 – 1 (IAA)On December 31, 2020, Albania Company provided the following data:Cash in bank 3,000, Time deposit – 30 days 1,000, Money market placement due on June 30,2021 2,000, Saving deposit in closed bank 100, Sinking fund for bond payable due June 30,2022 1,500, Petty cash fund 20,v The c...

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Problem 1 – 1 (IAA) On December 31, 2020, Albania Company provided the following data: Cash in bank Time deposit – 30 days Money market placement due on June 30,2021 Saving deposit in closed bank Sinking fund for bond payable due June 30,2022 Petty cash fund

3,000,000 1,000,000 2,000,000 100,000 1,500,000 20,000

v The cash in bank included customer check of P200,000 outstanding for 18 months. v Check of P250,000 in payment of accounts payment of accounts payable was dated and recorded on December 31,2020 but mailed to creditors in January 15,2021. v Check of P100,000 dated January 31,2021 in payment of accounts payable was recorded and mailed December 31,2020. v The reporting period is the calendar year. The cash receipt journal was held open until January 15,2021 during which time an amount of P450,000 was collected and recorded on December 31,2020.

Required: 1. Prepare adjusting entries on December 31,2020. 2. Compute the total amount of cash and cash equivalent that should be reported on December 31,2020. 3. Explain the presentation of the items excluded from cash and cash equivalents.

Problem 1 – 2 (IAA) Argentina Company reported the following accounts on December 31,2020. Cash on hand Petty cash fund Security Bank current account PNB current account BDO current account (overdraft) BSP treasury bill – 120 days BPI time deposit – 90 days Bond sinking fund

1,000,000 50,000 2,000,000 1,500,000 ( 200,000) 3,000,000 2,000,000 2,500,000

v The cash on hand included a customer postdated check of P150,000 and postal money order of P50,000. v The petty cash fund included unreplenished petty cash vouchers for P10,000 and an employee check for P5,000 dated January 31,2021. v The BPI time deposit is set aside for acquisition of land to be made in early January 2021. v The bond sinking fund is set aside for payment of bond payable due December 31,2021.

Required: 1. Prepare adjusting entries on December 31,2020. 2. Compute the total amount of cash and cash equivalents. 3. Explain the presentation of the items excluded form cash and cash equivalents.

Problem 1 – 10 (AICPA Adapted) Tranvia Company revealed the following information on December 31,2020: Cash in checking account Cash in money market account Treasury bill, purchased November 1,2020 maturing January 31,2021 Time deposit purchased December 1,2020 maturing March 31,2021

350,000 750,000 3,500,000 4,000,000

What amount should be reported as cash and cash equivalents on December 31,2020? a. b. c. d.

1,100,000 3,850,000 4,600,000 8,600,000

Problem 1 – 11 (IAA) Affable Company provided the following information at year-end comprising the cash –account: Cash in bank – demand deposit Cash on hand Postage stamps unused Certificate of time deposit Money order Manager check Traveler check Postdated

What total amount should be reported as cash at year-end? a. b. c. d.

8,050,000 7,050,000 6,550,000 6,450,000

5,000,000 400,000 5,000 1,500,000 50,000 100,000 1,000,000 500,000

Problem 1 – 12 (AICPA Adapted) Thor Company provided the following data on December 31,2020: Checkbook balance Bank statement balance Check drawn on Thor’s account, payable to supplier, dated and recorded on December 31,2020 but not mailed until January 31,2021 Cash in sinking fund

4,000,000 5,000,000

500,000 2,000,000

On December 31,2020, what amount should be reported as cash under current assets? a. b. c. d.

4,500,000 5,500,000 3,500,000 6,500,000

Problem 1 – 13 (AICPA Adapted) Joana Company had the following account balances on December 31,2020: Petty cash fund Cash on hand Cash in bank – current account Cash in bank – payroll account Time deposit Cash in bank – restricted account for plant addition, expected to be disbursed in early 2021 Cash in sinking fund set aside for bond payable due June 30,2021

50,000 500,000 4,000,000 1,000,000 2,000,000 500,000 1,500,000

The petty cash fund included unreplenished December 2020 petty cash expense vouchers of P5,000 and employee IOU of P5,000. The cash on hand included a P100,000 check payable to the entity dated January 31,2021. What total amount should be reported as cash and cash equivalent on December 31,2020? a. b. c. d.

6,940,000 8,940,000 7,940,000 7,440,000

Problem 1 – 14 (AICPA Adapted) On December 31,2020 Lamentable Company had the following cash balance: Cash in bank – current account Petty cash fund – all funds were reimbursed at year – end Time deposit – three months, due January 15,2021 Saving deposit

6,000,000 50,000 2,500,000 1,000,000

Cash in bank in included P 400,000 of compensating balance against short term borrowing arrangement. The compensating balance us legally restricted as to withdrawal. What total amount should be reported as cash and cash equivalents? a. b. c. d.

9,500,000 9,150,000 9,100,000 6,950,000

Problem 1 – 15 (AICPA Adapted) Baloney Company had the following account balance on December 31,2020: Cash in bank Cash on hand Cash restricted for addition to plant in 2021

2,250,000 125,000 1,600,000

Cash in bank included P 600,000 of compensating balance against short – term borrowing arrangement. The compensating balance is not legally restricted as to the withdrawal. What total amount should be reported as cash on December 31,2020? a. 1,775,000 b. 2,250,000 c. 2,375,000 d. 3,975,000

Problem 1 – 16 (IAA) Yasmin Company provided the following on December 31,2020: Petty cash fund Current accounts – First Bank Current account 0 Second Bank (overdraft) Money market placement – Third Bank Time deposit – Fourth Bank

50,000 4,000,000 ( 250,000) 1,000,000 2,000,000

• A check for P100,000 was drawn against First Bank current account dated and recorded December 29,2020 but delivered to payee on January 15,2021. • The Fourth Bank time deposit is set aside for land acquisition in early January 2021. What total amount should be reported as cash and cash equivalents on December 31,2020? a. b. c. d.

5,050,000 5,150,000 4,900,000 4,150,000

Problem 1 – 17 (IAA) On December 31,2020, Roma Company reported cash balance on P9,950,000. Undeposited collections Cash in Bank – BDO checking account Undeposited NSF check received from customer, Dated December 1,2020 Undeposited check from a customer, dated January 15,2021 Cash in bank – BDO fund for payroll Cash in bank – BDO time deposit, 90 days Cash in foreign bank restricted Cash in bank – BDO value added tax account Total

600,000 4,000,000 150,000 250,000 1,000,000 2,000,000 1,500,000 450,000 9,950,000

On December 31,2020, what total amount should be reported as cash and cash equivalents? a. b. c. d.

7,600,000 8,200,000 6,050,000 8,050,000

Problem 1 – 18 (AICPA Adapted) Aruba Company had a checkbook balance on December 31,2020 of P8,000,000 and held following items in the safe. Check payable to Aruba, dated January 5,2021 Included in December 31 checkbook balance Check payable to Aruba deposited December 20, and included in December 31 checkbook balance But returned by bank on December 30, stamped “NSF”. The check was redeposited January 2,2021, And cleared January 3,2021.

2,000,000

500,000

Check drawn on Aruba’s account and payable to a vendor, Dated and recorded December 31 but not mailed Until January 15,2021

1,500,000

Cash on hand – undeposited collections Change fund Time deposit for plant expansion Treasury bill Money market placement Postage stamps unused

400,000 40,000 1,000,000 2,500,000 3,000,000 10,000

1. What amount should be reported as cash on December 31,2020? a. b. c. d.

7,400,000 7,440,000 8,440,000 7,450,000

2. What total amount should be reported as cash equivalents on December 31,2020? a. b. c. d.

6,500,000 3,000,000 5,500,000 2,500,000

Problem 1 – 19 (IAA) Ecstasy Company reported the following information at the end of the current year. • •

Share investments of P1,000,000 that are actively traded in the Philippine Stock Exchange. Government treasury bills of P2,000,000. 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 P3,400,000 in the form of coins, currency, saving account and checking account. Commercial papers pf P1,500,000. The term of the commercial papers is nine months and the instruments were purchased on December 31 at which time they had three months to go until the mature.

1. What total amount should be reported as cash at the end of current year? a. b. c. d.

3,400,000 5,400,000 4,900,000. 6,900,000

2. What total amount should be reported as cash equivalent at the end of current year? a. b. c. d.

3,500,000 4,500,000 1,500,000 2,500,000

Problem 1 -20 (PHILCPA Adapted) Marjorie Company established a petty cash fund of P50,000 with the following information: Coins and currency Petty cash vouchers: Gasoline Medical supplies Repair IOU from an employee Check drawn payable to the order of Ann Cruz, petty cash Custodian, representing her salary Check of an employee returned by bank marked “NSF” A sheet of paper with the names of several employees Together with a contribution for a birthday party And attached to the sheet of paper is a currency of

22,000 3,000 1,000 1,500 3,500 15,000 3,000

5,000

What amount of petty cash fund should be reported? a. b. c. d.

42,000 27,000 37,000 22,000

Problem 1 – 21 (PHILCPA Adapted) Admirable Company had a petty cash fund which included the following details: Coins and currency Paid vouchers Transportation Gasoline Office Supplies Postage stamps Due from employees Employee’s check returned by bank marked “NSF” Check drawn to the order of petty cash custodian What amount of petty cash should be reported? a. b. c. d.

2,000 7,000 6,000 9,000

2,000 600 400 500 300 1,200

3,000 1,000 4,000

Problem 1 – 22 (ACP) Love Company reported the following information in relation to cash on December 31,2020: • • • •

Checkbook balance, P4,000,000. Undeposited collections, P400,000. A customer check amounting to P200,000 dated January 2,2021 was included in the December 31,2020 checkbook balance. Another customer check for P500,000 deposited on December 22,2020 was included in the checkbook balance but returned by the bank for insufficiency of fund. This check was redeposited on December 26,2020 and cleared two days later.

• •

A P400,000 check payable to supplier dated and recorded on December 30,2020 was mailed on January 16,2021. A petty cash fund of P50,000 comprised the following on December 31,2020:

Coins and currencies Petty cash and vouchers Refundable deposits for returnable containers

•

5,000 40,000 5,000 50,000

A check of P40,000 was drawn on December 31,2020 payable to Petty Cash.

1. What is the adjusted cash in bank on December 31,2020? a. b. c. d.

4,600,000 4,200,000 4,400,000 3,700,000

2. What total amount should be reported as cash on December 31,2020? a. 4,645,000 b. 4,845,000 c. 4,600,000 d. 4,650,000...