Financial Accounting 1 Bring Home Quiz Straight Problems Instruction: Answer only what is required. 1.

.) The December 31, 2010 trial balance of Celine Company includes the following accounts: Cash on hand P 200,000 Petty Cash Fund 20,000 Philippine Bank current account5,000,000 Manila Bank current account 4,000,000 City Bank current account (100,000) Asia Bank saving account 250,000 Asia Bank time deposit, 90 days 2,000,000 Cash on hand includes the following items: Customers check for P35,000 returned by bank December 26, 2010 due to insufficient fund but subsequently redeposited and cleared by the bank on January 10, 2011. Customers check for P15,000 dated January 10, 2011, received December 23, 2010. The petty cash fund consists of the following items on December 31, 2010. Currency and coins 5,000 IOUs from officers 2,000 Unreplenished petty cash vouchers 12,000 19,000 Include among the checks drawn by Celine against the Philippine bank current account nd recorded in December 2010 are the following: Check written and dated December 23, 2010 and delivered to payee on January 3, 2011, P25,000. Check written December 26, 2010, dated January 30, 2011, delivered to payee on December 28, 2010, P45,000. The Credit balance in City Bank current account represents checks drawn in excess of the deposit balance which are still outstanding at December 31, 2010. The Saving account deposit in Asia Bank has been set aside by the Board of Directors for acquisition of new equipment. This amount is expected to be disbursed in the next 3 months from the end of the reporting period. Required: 1. Cash on hand 2. Petty Cash Fund 3. Philippine Bank current account 4. Cash and cash equivalents 2.) On October 31 of the current year, the bookkeeper prepared the following bank reconciliation for Complex Company: Cash account balance 990,000 Less: Bank service charge 5,000 Deposit outstanding 45,000 Check erroneously charged by bank against companys account 10,000 60,000 Balance 930,000 Add: Checks outstanding 125,000 Unrecorded collections 45,000 170,000 Bank Statement balance 1,100,000 The entitys book for the month of November showed the following entries: October 31 balance 990,000 Credits 1,200,000 Debits 710,000 The bank statement showed the following on November 30: October 31 balance 1,100,000 Credits 500,000 Debits 1,000,000 The November bank debits include the following: Debit memo for service charge 10,000 Debit memo for a customers NSF check 50,000 During the month of November, the bank corrected the P10,000 error committed in prior month.

The entity recorded as cash receipt a customers note of P100,000 placed with the bank for collection on November 30. The note was not collected until the subsequent month. Required: Bank reconciliation on November 30, showing adjusted balances. Note: Solve for Adjusted balance of Deposit in transit and Outstanding Checks on November 30. 3.) The following transactions affecting the account receivable of Wonder Company took place during the year ended December 31, 2010: Sales (cash and credit) 5,900,000 Cash received from credit customers, all of whom took advantage of the discount feature of the entitys credit terms 4/10, n/30 3,024,000 Cash received from cash customers 2,100,000 Accounts receivable written off as worthless 50,000 Credit memorandum issued to credit customers for sales returns and allowances 250,000 Cash refunds given to cash customers for sales returns and allowances 20,000 Recoveries on accounts receivable written off as uncollectable in prior periods (not included in cash amount stated below) 80,000 The following balances were taken from the December 31, 2010 statement of financial position: Accounts receivables Allowance for bad debts 950,000 90,000

The entity provided for its net uncollectible account losses by crediting allowances for bad debts for 2% of net sales for the current period. Question 1. What is the balance of accounts receivable on December 31, 2010? 2. What is the balance of allowance for the bad debts after adjustment on December 31, 2010? 4.) Dalisay bank loaned P10,000,000 to Marian Company on January 1, 2008. The terms of the loan require principal payments of P2,000,000 each year for 5 years plus interest at 10%. The first principal and interest payment is due on January 1, 2009. Marian Company made the required payments during 2009 and 2010. However, during 2010 Marian Company began to experience financial difficulties, requiring Dalisay Bank to reassess the collectibility if the loan. On December 31, 2010, Dalisay Bank has determined that the remaining principal payments will be collected but the collection of the interest is unlikely. The Bank has accrued the interest for 2010. The principal payments are expected to be P1,000,000 on January 1, 2011, P2,000,000 on January 1, 2012 and P3,000,000 on January 1, 2013. Round off present value factors to two decimal places. Question 1.) What is the loan impairment loss on December 31, 2010? 2.) What is the interest income to be reported by Dalisay Bank in 2011? 3.) What is the carrying amount of the loan receivable on December 31, 2011? 5.) Pangasinan Company is a dealer in equipment. On December 31, 2010, Pangasinan Company sold an equipment in exchange for a noninterest bearing note requiring five annual payments of P500,000. The first payment was made on December 31, 2011. The market interest rate for similar notes was 8%/ The relevant present value factors are: PV of 1 at 8% for 5 periods 0.68 PV of an ordinary annuity of 1 at 8% for 5 periods 3.99 Question 1.) In its December 31, 2010 statement of financial position, what should Pangasinan Company report as note receivable? 2.) What amount of interest income should be reported by Pangasinan Company for 2011? 6.) On June 30, 2010, Bay Company discounted at the bank a customers P600,000, 6-month, 10% note receivable dated April 30, 2010. The Bank discounted the note 12%. The proceeds from this discounted note amounted to?

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