PROBLEM 1 – Cash and Cash Equivalents

The controller of SCHNEIZEL Co. is attempting to determine the amount of cash to be reported on its
December 31, 2014, statement of financial position. The following information is provided.

1. Commercial savings account of P600, 000 and a commercial checking account balance of P900, 000 are held
at First National Bank of Britannia.
2. Money market fund account are held at Eleven Co. (a mutual fund organization) permits Eastwood to write
checks on this balance, P5, 000, 000.
3. Travel advances of P180, 000 for exclusive travel for the first quarter of next year (employee to reimburse
through salary reduction).
4. A separate cash fund in the amount of P1, 500, 000 is restricted for the retirement of long-term debt.
5. Petty cash fund of P1, 000.
6. An I.O.U. from Marianne, a company customer, in the amount of P190, 000.
7. A bank overdraft of P110, 000 has occurred at one of the banks the company uses to deposit its cash receipts.
At the present time, the company has no deposits at this bank.
8. The company has two certificates of deposit, each totaling P500, 000. These CDs have a maturity of 120
days.
9. Schneizel has received a check that is dated January 12, 2015, in the amount of P125, 000.
10. Schneizel has agreed to maintain a cash balance of P500, 000 at all times at First National Bank of Britannia
to ensure future credit availability.
11. Schneizel has purchased P2, 100, 000 of commercial paper of Suzaku Co. which is due in 60 days.
12. Currency and coin on hand amounted to P7, 700.

Required:
Compute the amount of cash and cash equivalents to be reported on Schneizel Co.’s statement of financial
position at December 31, 2014.

PROBLEM 2 – Cash and Cash Equivalents

The controller of WESTEROS Company, in an attempt to determine the amount to be reported on its December
31, 2014 statement of financial position as cash and cash equivalents, has identified the following items;
 Correct cash balance in BPI, restricted for payroll payment, P350, 000
 Special account in BDO used as a bond sinking fund, P350, 000
 Postal money orders, P90, 000
 Treasury warrants, P100, 000
 Check from a customer on hand dated January 2, 2013; P180, 000
 Traveler’s check on hand, P200, 000
 Utility deposit receipt (made to Essos Company), P250, 000
 Checks to suppliers on hand (dated December 29, 2012), P45, 000

Required:
The amount to be reported by WESTEROS Company as cash and cash equivalents is

PROBLEM 3 - Cash and Cash Equivalents

The following data pertain to DANVERS Corporation on December 31, 2014:
Current account at Metrobank P 1,800,000
Current account at Allied Bank (100,000)
Payroll account 500,000
Foreign bank account (in equivalent pesos) 800,000
Savings deposit in a closed bank 150,000
Postage stamps 1,000
Employee’s postdated check 4,000
IOU from employees 10,000
Credit memo from a vendor for a purchase return 20,000
Traveler’s check 50,000
Money order 30.000
Petty cash fund (P4, 000 in currency and expense receipts for P6, 000) 10,000
Pension fund 2,000,000
DAIF check of customer 15,000
Customer’s check dated 1/1/15 80,000
 Time deposit – 30 days 200,000
Money market placement (due 6/30/15) 500,000
Treasury bills, due 3/31/15 (purchased 12/31/14) 200,000
Treasury bills, due 1/31/15 (purchased 1/1/14 300,000

Required:
Compute for the cash and cash equivalents that should be reported on the December 31, 2014 statement of
financial position of DANVERS Corporation.

PROBLEM 4 – Bank Reconciliation

PEARSON-SPECTER Company deposits all receipts and makes all payments by check. The following
information is available from cash records.

June 30 Bank Reconciliation

Balance per bank P7, 000
Add: Deposits in transit 1, 540
Deduct: outstanding checks (2,000)
Balance per books P6, 540

Month of July Results

Per Bank Per Books

Balance July 31 P 8,650 P 9,250
July deposits 5,000 5,810
July checks 4,000 3,100
July note collected (not included in July deposit) 1,000 -
July bank service charge 15 -
July NSF check from a customer, returned by the bank
(recorded by bank as a charge) 335 -

Required:
a.) Prepare a bank reconciliation going from balance per bank and balance per book to correct cash balance.
b.) Prepare the general journal entry or entries to correct the Cash account.

PROBLEM 5 – Bank Reconciliation

Keating Company has just received the August 31, 2014, bank statement, which is summarized below.

Country National Bank Disbursements Receipts Balance

Balance, August 1 P 9,369
Deposits during August P 32,200 41,569
Note collected for depositor, including P40 interest 1,040 42,609
Checks cleared during August P 34,500 8,109
Bank service charges 20 8,089
Balance, August 31 8,089

The general ledger Cash account contained the following entries for the month of August.

Cash
Balance, August 1 10, 050 Disbursements in August 34, 903
Receipts during August 35, 000

Deposits in transit at August 31 are P3, 800, and checks outstanding at August 31 total P1, 050. Cash on hand at
August 31 is P310. The bookkeeper improperly entered one check in the books at P146.50 which was written
for P164.50 for supplies (expense); it cleared the bank during the month of August.

Required:
a. Prepare a bank reconciliation dated August 31, 2014, proceeding to a correct balance.
b. Prepare any entries necessary to make the books correct and complete.
c. What amount of cash should be reported in August 31 statement of financial position?