HANDOUT: ACCOUNTING FOR CASH AND CASH EQUIVALENTS

1. The statement of financial position of Kwarta Company shows cash of 330,820. The
following items were found to comprise this total amount:
Checking account in Metrobank (outstanding checks as of year-end
totaled 15,200)
105,200.00
Savings account is Far East bank

30,800.00

Petty cash fund (including expense receipts for 250)

1,500.00

Cash on hand (undeposited sales receipts)

4,200.00

Sinking fund cash

35,000.00

Cash in foreign bank (in equivalent pesos)

65,000.00

Customers' check on hand

Traveler's Check

14,000.00

Manager's Check

23,120.00

Short term treasury bills

52,000.00

What is the correct amount of cash?

2. Kuton Companys checkbook balance at December 31, 2012 was 180,000. In addition,
Kuton held the following items in its safe on that date:
Check payable to Kuton dated January 2, 2013 in payment of a sale made in
December 2012, included in December 31 checkbook balance- 65,000.
Check payable to Kuton deposited December 15, but returned by the bank DAIF20,000.
Check drawn on Kutons account, payable to a vendor, dated and recorded on
December 30 but not yet mailed to payee as of December 31, 2012- 15,000.
What is the correct cash balance of the company?
3. Green Companys general ledger showed a balance of 2,205,600 in its cash account on
December 31, 2012. Included in this balance are the following items:
DAIF checks returned by bank
Savings account
IOUs
Postage stamps
Bank draft
Cash on hand
Cash sinking fund
Customer's checks dated January 2013
Travel advances
Traveler's Checks
What is the correct balance of cash?

20,000.00
750,000.00
1,200.00
600.00
10,000.00
30,000.00
500,000.00
5,400.00
4,000.00
8,000.00

4. Jennifer Incorporated established a petty cash fund of 5,000 for incidental expenses on
June 1, 2012. At the end of the month, the count of cash on hand indicated that 670.40

remained in the fund. A review of the petty cash vouchers disclosed the following
expenses had been incurred during the month:
Office supplies
341.60
Transportation
1,321.40
Postage
780.00
Miscellaneous
837.60
Representation
1,000.00
What is the amount of cash shortage?
Prepare the adjusting entry for the end of the month.
5. In your cash count of the petty cash fund of Canyon Company as of July 4, 2012, you
found the following composition of its petty cash fund:
Bills and coins counted
2,450.00
Approved and signed petty cash vouchers
Dated June 2012
3,300.00
Dated July 1-4, 2012
800.00
IOU from Joe Santos, an employee
1,400.00
A check drawn by Juvy Victoria, an employee, dated July 15, 2012
2,000.00
The petty cash fund has an imprest balance of 10,000. The companys reporting period
ends on June 30.
What is the correct balance of the petty cash fund?
How much is the cash shortage or overage?
Prepare the adjusting entry for June 2012
6. You are attempting to determine an apparent cash shortage that you believe resulted
from an employees theft. You have assembled the following information for the month
of March:
Cash balance per books, March 1
Cash receipts for March per books
Cash disbursements for March per books
Cash balance per bank statement, March 31
Deposit in transit, March 31
Outstanding checks, March 31
Bank service charge for March
What is the amount of cash shortage?

115,963.70
246,475.00
334,709.10
15,341.40
9,000.00
2,703.80
92.00

7. In reconciling the book and bank balance of the cash account of Perlas Corporation, you
discover the following for the month of December 2012:
Balance per bank statement
400,000.00
Balance per books
387,000.00
Receipts not yet deposited
100,000.00
Bank service charge
1,000.00
Customer's check returned by bank marked DAIF
22,000.00
A paid check for 40,000 was recorded in the cash book as 4,000. Assuming no other
errors were noted, what is the amount of the outstanding checks at December
31, 2012?

8. The following data related to Jennifer Services Incorporated were gathered:

30-Nov-12
31-Dec-12
Balance per books
270,311.00
Balance per bank statement
294,771.00
148,986.00
Receipts not yet deposited
21,270.00
32,925.00
Outstanding checks
40,525.00
35,191.50
Bank service charges
295.00
158.00
Interest credit by bank
5,500.00
4,925.00
Other information:
Receipts and disbursements per books during December are P1,072,850 and
P1,195,536.50, respectively.
Total credits reflected in the bank statement amounted to P1,065,620.
Check #137412 for P2,300 recorded by depositor as P3,200 in error.
Customer check for P5,947 deposited on December 28, 2012 was found to be
uncollectible.
Interest for P625 chargeable to Jennyfer Services was erroneously charged by
the bank to the company.
No sufficient fund checks in the amount of P5,000 was returned by the bank and
redeposited by the company during December. No entry was made on the books
for the return or redeposit.
Prepare a proof of cash.
9. Leona Company had the following account balances on December 31, 2011:
Cash in Bank- current account
4,000,000.00
Cash in Bank- payroll account
1,500,000.00
Cash on Hand
500,000.00
Cash in Bank- restricted for equipment acquisition on 2012
1,000,000.00
Treasury bill purchased November 1, 2011 to mature on February 1, 2012
2,000,000.00
The cash on hand includes a P 200,000 customer check payable to Leona Company, dated
January 15, 2012. What should be reported as cash and cash equivalents on
December 31, 2011?
10. On December 31, 2011, Tigres Company had the following cash balances:
Cash in Bank
5,000,000.00
Petty Cash Fund
50,000.00
Time Deposit, one year, due March 1, 2012
1,000,000.00
Saving Deposit
500,000.00
A check of P 100,000 dated January 15, 2012 in payment of accounts payable was recorded
and mailed on December 28, 2011. How much cash and cash equivalents should be
reported on December 31, 2011?
11. The cash account in Jen Companys ledger on December 31, 2011 showed a balance of
P 5,250,000 which included the following:
Petty Cash Fund
Undeposited receipts, including a post-dated customer check of
P200,000

50,000.00
1,300,000.00

Cash in Bank
Cash in Sinking Fund
Expenses paid out of collections, not yet recorded
IOUs signed by employees

2,500,000.00
1,000,000.00
250,000.00
150,000.00

5,250,000.00
At what amount should Jen Company report as cash in the December 31, 2011
statement of financial position?
12. Enipr Company had the following account balances at December 31, 2011:
Cash on Hand and in Bank
5,000,000.00
Cash restricted for bond payable due on June 30, 2013
2,000,000.00
Time Deposit
6,000,000.00
Saving deposit set aside for dividend payable on June 30, 2012
1,000,000.00
In the December 31, 2011 statement of financial position, what total amount
should be reported as cash and cash equivalents?
13. On April 1, Jennifer Company established an imprest system petty cash fund for P
10,000 by writing a check drawn against the general checking account. On April 30, the
fund contained the following:
Currency and coins
3,000.00
Receipts for office supplies
4,000.00
Receipts for postage still unused
2,000.00
Receipts for transportation
600.00
On April 30, the entity wrote a check to replenish the fund. What is the amount of
replenishment under the imprest fund system?
14. During the audit of Maganda Company on December 31, 2011, the following data are
gathered:
Balance per book
Bank charges
Outstanding checks
Deposit in transit
Customer note collected by bank
Interest on customer note
Customer check returned NSF
Depositor's note charged to account
The correct cash balance amounts to ____.

4,000,000.00
10,000.00
950,000.00
1,200,000.00
1,500,000.00
60,000.00
250,000.00
1,000,000.00