Cash and Cash equivalents PDF

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Cash  and  Cash  EquivalentsDiscussion  ProblemsA. Relating to cash items of Kim Corporation, you established the following data as of December 31, 2007:Bank credit memo P15, Bank debit memo 450 Balance per bank statement 82, Cash on hand and in bank, per books 72, Outstanding ch...

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REVPRA&A' Cash'and'Cash'Equivalents' Discussion(Problems( A.

Relating to cash items of Kim Corporation, you established the following data as of December 31, 2007: Bank credit memo Bank debit memo Balance per bank statement Cash on hand and in bank, per books Outstanding checks Cash on hand per count Check of Kin, Inc. erroneously charged by the bank Check # 4523 for P1,950 in payment to a supplier was erroneously recorded as P1,590

B.

P15,000 450 82,200 72,630 12,365 8,625 2,100

________________

1.

How much is the cash shortage or overage as of December 31, 2007. Indicate whether shortage or overage.

________________

2.

What is the adjusted cash balance as of December 31, 2007?

The following information are made available to you:

Outstanding checks, end of the month Deposits in transit, end of the month Bank credit memo for note collected Bank service charges NSF check returned by bank (recorded by the depositor in the month following the month when checks were returned) Cash per general ledger, end of the month Cash per bank statement, end of the month Total receipts per books Total charges by bank

January 2007 P 65,000 54,500 123,500 3,250

25,000 (92,250) 13,500 837,000 598,000

February 2007 P 43,000 31,200 98,800 4,650

19,000 69,300 156,250 810,850 647,700

________________

3.

What is the adjusted cash balance as of February 28, 2007?

________________

4.

What is the adjusted amount of cash receipts during February?

________________

5.

What is the adjusted amount of total disbursements during February?

________________

6.

What is the adjusted cash balance as of January 31, 2007?

REVPRA&A' Cash'and'Cash'Equivalents' D.

You were assigned to account for the Cash account of Dragon Ball, Inc. for the year ended December 31, 2007. Your cash count of the Petty Cash Fund and undeposited collections as of that date showed the following: Currency and coins Expense vouchers Employees’ IOUs Customers’ checks in payment of accounts Total

P 3,595.01 1,920.75 573.50 2,500.00 P 8,589.26

The amount of Petty Cash Fund per general ledger is P6,000. Upon comparing the official receipts with the bank validated deposit slips, you noted that P3,025.60 was not yet deposited to the bank.

E.

________________

7.

What is the amount of cash shortage?

________________

8.

What is the amount of Petty Cash Fund to be shown on December 31, 2007 balance sheet?

Red Corporation records showed the following: Outstanding checks, November 30 Customer’s NSF check recorded in December but returned in November Service charges made by the bank in November and recorded in December Total credits to the cash account in all journals during December Checks and charges returned by bank in December including a December service charge of P3,000 and NSF check of P12,000 ________________

F.

9.

P90,000 6,000 2,400 230,400

195,000

What is the amount of outstanding checks as of December 31?

A count of the petty cash fund on January 3, 2008 revealed the following composition: Bills and coins Vouchers: December 2007 dates January 2008 dates IOUs (all dated December 2007) Employee’s check dated December 27, 2007 Employee’s check dated January 14, 2008 Unsigned pay envelope payable to an employee (the envelope has been opened and the money has been removed)

P 2,300 850 200 420 280 425

500

The balance of petty cash fund per books is P 4,500. ________________

10.

How much is the cash shortage or overage. Indicate whether shortage or overage.

REVPRA&A' Cash'and'Cash'Equivalents' ________________

G.

11.

What is the correct amount of petty cash fund to be shown on the balance sheet as of December 31, 2007?

The following information were revealed in trying to reconcile the bank statement balance as of June 30 with the client’s records as of the same date: a. Total credits per June bank statement were P P310,000. b. Among the bank credits in May was a customer’s note collected by the bank for the account of the company which the company recognized in June. Proceeds was P 30,300. c. Client books for June showed receipts of P 420,000. d. Deposits in transit on May 31 were P 15,000. e. The bank credited the client’s account in June for P 50,000 representing loan approved and granted by the bank. Your client has not recorded this yet. f. A deposit of P 4,300 was recorded by your client as P 3,400 in December. The bank recorded the deposit at its correct amount. ________________

H.

12.

How much were deposits in transit as of June 30?

The Patrick Company had a weak internal control structure over its cash transactions. Facts about its cash position at November 30, 2007 were as follows: The cash books showed a balance of P1,890,162, which included undeposited receipts. A credit of P10,000 on the bank’s records did not appear on the books of the company. The balance per bank statement was P1,555,000. Outstanding checks were No. 62 for P11,625, No. 183 for P15,000, No. 284 for P25,325, No. 8621 for P19,071, No. 8623 for P20,680, and No. 8632 for P14,528. The cashier stole all undeposited receipts in excess of P379,441 and prepared the following reconciliation:

$$$$$$$$$$$$ $ $ $

Balance per books, November 30, 2007 Add:$$outstanding$checks$ 8621 8622 8632$ $ $

P1,890,162

$

$

Less:$$undeposited$receipts$ $ Balance$per$bank,$November$30,$2007$ Deduct:$unrecorded$credit$ $ True$cash,$November$30,$2007$ $

$ $ $ $

$ $ $ $

P19,071$ $$20,680$ $$14,528$ $$$$$$$$$$$$$$$$$44,279$$$$$ $$$$$$$$$P$1,934,441$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$379,441$ $ $$$$$$$$$P$1,555,000$ $ $ $$$$$$$$$$$$$$$$$10,000$$ $ $$$$$$$$$P$1,545,000

________________

13.

How much did the cashier steal?

________________

14

What is the correct amount of cash to be shown on the balance sheet on November 30, 2007?

REVPRA&A' Cash'and'Cash'Equivalents' I.

The accountant of Maharlika Company prepared the following bank reconciliation for December 31, 2007:

$

$

$ $ $ $

$ $ $ $

Balance$per$bank$statement$ Add: deposit in transit $$$$$$$$$$Note$collected$by$bank$$ Total$ $ $ $ Less:$$outstanding$checks$ $ Balance$per$ledger$ $

$

$

$

$

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

P350,000$ 175,250 $$$$15,000$ P540,250$ $$246,750$ P293,500$

In the course of your examination, you noted the following information: a.

At December 31, 2007, the bank statement and the general ledger showed balances of P350,000 and P293,500, respectively. b. The cut-off bank statement showed a bank charge on January 2, 2008 for P25,000 representing a correction of an erroneous bank credit. c. Included in the list of outstanding checks were the following: - a check payable to a supplier dated December 29, 2007, in the amount of P15,000 released on January 5, 2008. - a check representing advance payment to a supplier in the amount of P37,200, the date of which is January 4, 2008 and released in December 2007 d. On December 31, 2007, the company received and recorded a customer’s check dated January 2008 amounting to P50,000. ________________

15.

What is the correct amount of deposit in transit on December 31, 2007?

________________

16.

What is the correct amount of outstanding checks as of December 31, 2007?

________________

17.

What is the correct cash balance December 31, 2007?

________________

18.

How much was the cash shortage?

' J.

The “Cash” account in the ledger of FORTUNE COMPANY on December 31, 2005 had a balance of P1,745,700. An examination of the account however disclosed the following:

1. The sales book was left open up to January 10, 2006 and cash sales totaling P18,200 were considered as cash sales in 2005. 2. Checks of P9,300 in payment of utilities were prepared before December 31, 2005 and recorded in the books on the same date, but mailed or delivered only on January 5, 2006. 3. Checks with January, 2006 dates totaling P 17,800 are being held by the cashier and were included as part of cash on December 31, 2005. The company’s experience shows that postdated checks are eventually realized. 4. Customer’s check for P 11,500 deposited with the bank on December 15, 2005 was returned on December 18, 2005. The return was not recorded in the books.

REVPRA&A' Cash'and'Cash'Equivalents' 5. The cash account includes P 230,000 set aside for payment of dividends. 6. The cash account includes a check received from a customer in May, 2005 for P3,500, which the company failed to deposit. Verification from the customer reveals that the amount will eventually be realized. 7. The cash account includes change fund amounting to P 5000. When the fund was counted, only P 4,450 was found. 8. The cash account includes P400,000 fund for payroll. 9. The cash account includes petty cash fund amounting to P 20,000. The fund was last replenished on December 24, 2005. When the fund was counted on January 3, 2006, the following were found: Bills and coins Vouchers with December, 2005 dates Vouchers with January, 2006 dates

P 13,000 5,500 1,300

10. An examination of the company’s sales invoice revealed that P3,500 check was received on December 30, 2005 from sale of scrap materials. The amount cannot be traced from the cash receipts book but was verified to have been deposited to the bank. ________________

19.

________________

20.

How much is to be presented as Cash and Cash Equivalents at December 31, 2005? How much is the shortage, if any, at December 31, 2005?...