I.

Components of Cash and Cash Equivalents

Problem 1. The following items are found in the Accounting Records of F1 Inc. on December 31,2011:

Coins P1,000,000

Currency 2,500,000

Money Orders 1,500,000

Foreign Currency Deposit (restricted) 2,000,000

Petty Cash Fund (P20,000 in vouchers and P30,000 IOUs from Employee) 100,000

Postage Stamp 50,000

IOU from the Company president 200,000

Postdated check from a customer of F1 Inc. 300,000

Unreleased or undelivered check for payment of accruals drawn by F1 400,000

Postdated check issued to a supplier of F1 Inc. 100,000

Savings Deposit in a Bank closed by BSP 500,000

Fund set aside for acquisition of Land to be disbursed on December 31,2013 3,000,000

Fund set aside for acquisition of Building to be disbursed on July 1,2012 2,000,000

Payroll fund 1,000,000

Dividend fund 200,000

Travel fund 300,000

Interest fund 100,000

Tax fund 400,000

Bond sinking fund Bonds payable will be due on December 31,2013 2,000,000

Bond sinking fund Bonds payable will be due on July 1,2012 1,000,000

Cash surrender value 10,000

Saving Deposit in BDO Bank (compensating balance of P200,000 unrestricted) 2,000,000

Saving Deposit in BPI Bank (compensating balance of P100,000 restricted for

Short-term borrowing) 1,600,000

Saving Deposit in MetroBank (compensating balance of P300,000 restricted for

Long-term borrowing) 2,800,000

 Time Deposit with remaining term of 30 days and acquired on September 1,2011 4,000,000

Time Deposit with original term of 5 years and remaining term of 80 days on

December 31,2011. It was acquired on December 21,2011 5,000,000

Current Account in PNB - (Overdraft) (500,000)

First Current Account in RCBC (Overdraft) (1,000,000)

Second Current Account in RCBC 3,000,000

Stale Check from a Customer 200,000

Stale Check issued to a supplier against Second Account in RCBC 100,000

Investment in Ordinary Shares 300,000

Investment in Preference Shares 400,000

Investment in Redeemable Preference Shares 90 days term 500,000

Required: What is the total cash and cash equivalents to be presented in the December 31,2011 Statement of
Financial Position of F1 Inc.?

II. Petty Cash Fund

Problem 2. Account at the petty cash fund of UFC Inc. showed its composition as follows:

Coins and currency P3,300

Paid Vouchers:
 Transportation 600

Gasoline 400

Office Supplies 500

Postage Stamps 300

Due from employees 1,200 3,000

Managers check returned by bank marked NSF 1,000

Check drawn by company to the order of petty cash custodian 2,700

A sheet of paper with names of several employees together with contribution for

a birthday gift of a co-employee. Attached to the sheer of paper is a currency of 5,000

Required: What is the amount of petty cash fund to be presented in the Statement of Financial Position?

III. Bank Reconciliation:

Problem 3. The following items are provided by Ayala Land Inc. regarding the bank reconciliation of one
of its current accounts in the Bank Philippine Islands for the year ended December 31,2011:

Ayala Land Inc. Bank Statement Balance P3,000,000

Current Account in BPI Bank 2,500,000

Bank Service Charge for the year 2011 200,000

Note Receivable Collected by Bank 300,000

NSF Check from Ayala Land Inc.s Customer 400,000

Interest on Note Receivable 100,000

Pre-authorized payment for electric bill (Ayala Land Inc. authorized BPI to

automatically pay its electric bill as submitted directly to BPI 300,000

 Outstanding check (including P100,000 certified check by BPI s manager) 400,000

Deposit in Transit 1,000,000

Check of P300,000 drawn and issued to a supplier but recorded by Ayala

Land Inc. as P200,000 100,000

Ayala Corporations Deposit credited by BPI to Ayala Land Inc. 500,000

Notes Payable of Ayala Property Management charged by BPI to Ayala

Land Inc. 300,000

Time deposit of Ayala Land Inc. of P1,000,000 matures on Dec. 31,2011

and credited by BPI to Ayala Land. Inc Account on that date 500,000

Note: The bank has not committed any error during 2011 except those specifically stated above. Any
remaining difference after reconciliation pertains to the cash shortage resulting from cashier and
accountants defalcation of companys cash.

Required: Based on the result of your audit, determine the following as of December 31,2011:

____________1. Adjusted balance per bank

____________2. Adjusted balance per book

____________3. Cash shortage arising from the cash defalcation by company s cashier and accountant

IV. Proof of Cash

Problem 4. The following data are provided by Meralco Inc. regarding its Current Account in RCBC Bank
for the months of November and December, 2011:

November 30 December 31

Balance per Book P 50,000 P 70,000

Balance per Bank 84,000 120,000

 Book debits or receipts ?

Book credits or disbursements 180,000

Bank debits or disbursements ?

Bank credits or receipts 210,000

Deposits in transit 40,000 75,000

Outstanding checks 65,000 119,000

NSF Checks 5,000 10,000

Bank Service Charge 1,000 4,000

Note collected by bank 15,000 20,000

Another NSF Check on December and redeposited by customer on

December (Meralco didnt prepare entry on redeposit) 40,000

Note: All reconciling items on November are recorded, adjusted and cleared by the book and bank on
December.

Required: Based on the result of your audit, determine the following:

____________1. Unadjusted Book debits or receipts on the month of December

____________2. Unadjusted Bank debits or disbursements on the month of December

____________3. Adjusted Balance per book or bank on November 30

____________4. Adjusted Bank receipts or Book receipts on the month of December

____________5. Adjusted Bank disbursements or Book disbursements on the month of December

____________6. Adjusted Balance per book or bank on December 31