SAMPLE PROBLEMS ON CASH
Problem 1
The following items are included as cash and cash equivalents in Bet Company as of December 31, 2017
a
.
b
.
c
.
d
.
e
.
f.
g
.
h
.
i.
j.
k
.
l.
m
.
n
.
o
.
p
.
q
.
r.
s
.
t.
u
.
v
.
w
.
x
.
Cash in Checking Account
250,000
Cash in Money Market Account, acquired 2 months before maturity
450,000
Tresury Bill, purchased December 1,2017; maturing February 28, 2018
1,500,000
Time Deposit purchased November 1, 2017; maturing March 31, 2018
3,500,000
Cash in Bank Current Account
4,000,000
Cash in Bank Payroll
Cash on hand, including check payable to the company dated January 30,2018, P 200,000
1,000,000
500,000
Cash in Bank for the construction of building expected to be disbursed in 208
2,000,000
Check book balance, which includes a check drawn payable to a supplier dated and recorded
December 31, 2017 but mailed only on January 3, 2018, P300,000. Bank statement balance is P
5,000,000
Cash in Sinking Fund
Certificate of Deposit
3,500,000
2,000,000
3,000,000
Postdated Customer Check
Traveler’s Check
300,000
150,000
Manager’s Check
250,000
Money Order
300,000
Share Investments, actively traded in the market
One-year Commercial paper purchased 2 months before maturity
Cash in bank, including P 500,000 compensating balance against short term borrowing
arrangements, not legally restricted
Cash in bank statement, with check still outstanding, P 300,000
1,000,000
500,000
2,750,000
1,700,000
Bank deposit closed by Central Bank
Voucher paid out of collection, not yet recorded
900,000
500,000
IOU by employees, taken out of collection, not yet recorded
300,000
Petty Cash Fund, with paid vouchers totaling P 3,000, not yet replenished. Per Count of bills and
coins at year end only amounts to P 6,500.
Investment in Preferred Shares purchased December 15, 2017, redeemable on February 15,
2018
1. The total amount of cash as of December 31, 2017 is
10,000
50,000
a. P 10,206,500
b. P 10,406,500
c. P 14,206,500
d. P 12,906,500
2. The total amount of cash equivalents as of December 31, 2017 is
a. P 5 ,450,000
b. 2,450,000
c. P 5,500,000
d. P 1,500,000
a.
b.
c.
d.
e.
f.
g.
h.
i.
Cash in Checking Account
Cash in Money Market Account
Tresury Bill, purchased December 1,2017;
maturing February 28, 2018,
Time Deposit purchased November 1, 2017;
maturing March 31, 2018
Cash in Bank Current Account
Cash in Bank Payroll
Cash on hand, including check payable to the
company dated January 30, 2018 P 200,000
Cash in Bank for the construction of building
expected to be disbursed in 208
j.
Check book balance, which includes a check
drawn payable to a supplier dated and recorded
December 31, 2017 but mailed only on January 3,
2018, P300,000. Bank statement balance is P
5,000,000
Cash in Sinking Fund
k.
Certificate of Deposit
l.
Postdated Customer Check
m.
n.
o.
p.
Traveler’s Check
Manager’s Check
Money Order
Share Investments, actively traded in the market
q.
One-year Commercial paper purchased 2 months
before maturity
Cash in bank, including P 500,000 compensating
balance against short term borrowing
arrangements, not legally restricted
r.
Cash
250,000
Cash Equ
Cash
450,000
1,500,000 3 months
Short Term
Investment
4,000,000
1,000,000
current liability
300,000
Non Current
Investment
since it is an
acquisition of
asset and not
as payment of
current
liabilities
3,800,000
150,000
250,000
300,000
2,750,000
Non Current
Invetmentpayment for
non-current
liability
3,000,000 Cash
Equivalent
Accounts
Receivable
Cash
Cash
Cash
Not to be
qualified- no
maturity dateTrading
500,000 Cash
Equivalent
Cash = P
2,750,000
If legally
restricted, not
included in
cash
categorized
either current
or long term
depending on
the related loan
s.
t.
u.
v.
w.
x.
Cash in bank statement, with check still
outstanding, P 300,000
Bank deposit closed by Central Bank
Voucher paid out of collection, not yet recorded
IOU by employees, taken out of collection, not yet
recorded
Petty Cash Fund, with paid vouchers totaling P
3,000, not yet replenished. Per Count of bills and
coins at year end only amounts to P 6,500.
Investment in Preferred Shares
TOTAL
1,400,000
Non current
asset
Expenses
Advances
6,500
14,206,500
50,000
5,500,000
Problem 2 - Bank reconciliation
1. Jane Co. is preparing its September 30, 2017 bank reconciliation. Relevant information is shown below:
Balance per books
1,480
Balance per bank statement
2,800
Collection on note by bank (including ₱250 interest)
2,500
NSF check returned by bank
500
Bank service charges for December
70
Deposits in transit
2,200
Outstanding checks (including certified checks of ₱100)
1,000


A ₱600 loan amortization of Jane Co. was erroneously debited by the bank to Tarzan Co.’s account.
A ₱650 collection of accounts receivable was erroneously recorded in the books as ₱560. The actual
amount deposited to the bank is ₱650.
3. The compound entry to reconcile the accounts includes a
a. net debit to cash for ₱2,020
b. net credit to cash for ₱700
b. credit to notes receivable for ₱2,500
d. net debit to accounts receivable for ₱590
UNADJUSTED
DEPOSIT IN TRANSIT
OUTSTANDING CHECKS
ERROR
PER BANK
2,800
2,200
(900)
(600)
ADJUSTED BALANCE
UNADJUSTED
COLLECTION OF NOTES
NSF
BANK SERVICE CHARGE
ERROR ( 650-560)
3,500 ADJUSTED BALANCE
Problem 3 - Computation of DIT and OC
The next three items are based on the following information:
Taken from the records of Girly Co. are the following:
Balance per books, October 31
Total Credits per books, November
Balance per books, November 30
Balance per bank statement, October 31
Balance per bank statement, November 30
4,440
8,320
2,400
5,520
4,560
PER BOOK
1,480
2,500
(500)
(70)
90
3,500
Total Debits per bank statement, November
Loan proceeds directly credited to Girly’s account in October
Collection of receivable directly credited to Girly’s
account in November – not yet recorded in the books
NSF checks returned in October
NSF checks returned in November - not yet recorded in the
books
Check received from a customer amounting to ₱1,800
was recorded in the books in October as
Overstatement in book debit in October
Overstatement in book credit in November
Understatement in bank debit in October
Overstatement in bank credit in October
Deposit amounting to ₱1,050 was recorded by
the bank in November as
Deposits in transit – October 31
Outstanding checks – October 31
OCTOBER
PER BOOK
RECEIPTS
4,440
1,200
2,800
1,200
600
900
300
180
800
300
290
370
150
4,500
3,800
DISBURSEMENTS
6,280
(1,200)
600
8,320
(1,620)
ADJUSTED BAL
5,560
4,060
PER BANK
5,520
(290)
(370)
1,840
DIT- OCTOBER
DIT-NOVEMBER
OC-OCTOBER
OC- NOVEMBER
ADJUSTED BAL
4,500
(300)
(800)
(300)
6,620
300
3,000
900
(4,500)
5,820
4,560
900
5,820
4,060
4. How much is the deposits in transit at November 30?
a. 5,820
b. 6,190
c. 5,340
d. 6,920
5. How much is the outstanding checks at November 30?
a. 7,620
b. 8,680
c. 9,120
d. 8,280
6. How much is the adjusted balance of cash at November 30?
a. 3,000
b. 3,300
c. 2,400
d. 3,580
Problem 4
(900)
300
2,800
(290)
(370)
(3,800)
5,560
2,400
600
(900)
1,620
(800)
NOVEMBER
(3,800)
8,280
(8,280)
6,620
3,000
Your client, Golden Bells Company, presented you with the following data:
Bank balances
November 30
December 31
Bank receipts in December
Deposits in transit
November 30
December 31
Outstanding checks
November 30
December 31
NSF checks returned by bank (recorded by client in
the month following the return)
November 30
December 31
Bank service charges (recorded by client in the month
following the month the charge)
November
December
Note collected by bank (recorded by the client in the
following month)
November
December
Erroneous bank charges (corrected by the bank in the
following month)
November 30
December 31
Erroneous bank credits (corrected by the bank in the
following month)
November
December
P1,500,00
2,100,000
2,300,000
58,000
47,000
97,000
46,000
15,000
25,000
10,000
18,000
76,000
84,000
25,000
37,000
45,000
50,000
Prepare a proof of cash for the month of December using the adjusted balances method and answer the
following:
7. The adjusted balance of cash in bank at November 30, 2017 is
a. P 1,441,000
b. P 1,486,000
c. P 1,461,000
d. 1,538,000
8. The Adjusted balance of December Receipts is
a. P 2,264,000
b. P 2,214,000
c. P 2,289,000
d. P 2,242,000
9. The adjusted balance of December Disbursements is
a. P 1,612,000
b. P 1,649,000
c. P 1,567,000
d. P 1,521,000
10. The adjusted balance of cash in bank at December 31, 2017 is
a. 2,138,000
b. P 2,101,000
c. P 2,147,000
d. P 2,088,000
Problem 4 – Answer
Unadjusted bank balance
Deposits in transit
November 30
December 31
Golden Bells Company
Nov. 30
1,500,000
Receipts
2,300,000
58,000
(58,000)
47,000
Disb.
1,700,000
Dec. 31
2,100,000
47,000
Outstanding checks
November 30
December 31
Erroneous bank charges
November 30
December 31
Erroneous bank credit
November 30
December 31
Adjusted balances
Unadjusted book balances (squeezed)
NSF checks returned by bank
November 30
December 31
Bank service charges
November
December
Note collected by bank
November
December
Adjusted balances
(97,000)
25,000
(97,000)
46,000
(46,000)
(37,000)
37,000
(25,000)
(45,000)
(45,000)
1,441,000
(50,000)
2,214,000
1,567,000
(50,000)
2,088,000
Nov. 30
1,390,000
Receipts
2,206,000
Disb.
1,549,000
Dec. 31
2,047,000
(15,000)
25,000
(25,000)
(10,000)
18,000
(18,000)
1,567,000
84,000
2,088,000
(15,000)
(10,000)
76,000
1,441,000
(76,000)
84,000
2,214,000
Problem 5
In auditing the books of Sta. Monica, Inc. for 2017, you find that a petty cash fund of P25,000 is maintained on
the imprest basis, but the company has failed to replenish the fund on December 31. Replenishment was
made and recorded on January 15, 2018 when a check for P18,500 was drawn to petty cash for expenses
paid. Your analysis discloses that P12,500 had been spent out of petty cash in 2017.
11. The amount reflected as Petty Cash Fund at the balance Sheet date in 2017 is
a. P 25,000
b. P 12,500
c. P 18,500 d. P 0
12. As per adjustment made at balance sheet date, Petty Cash account should be
a. Credited by P 18,500
b. Credited by P 12,500
c. Debited by P 6,000
c. No Adjusting entry be made
Expenses
Petty Cash Fund
12,500
12,500
Correct balance of petty cash fund = P25,000 – P12,500 = P12,500
Problem 6
You examined the petty cash fund of the Victor Company immediately after the close of business on August
31, 2017, the end of the company’s fiscal year. Your audit showed the following fund composition:
Currencies
Coins
Petty cash vouchers:
Gasoline payments for delivery vehicle
Office supplies
Medicines for employees
P2,900
400
250
160
240
Transportation
Office equipment repairs
Loans to employees
A check drawn by the company payable to
the order of the petty cash custodian,
representing her salary
An employee’s check returned by the bank
because of insufficient funds
A piece of paper with names of several
employees together with a contribution
for a wedding gift for an employee.
Attached to the sheet of paper is a
currency of
400
400
800
3,800
1,200
500
The petty cash general ledger account has an imprest balance of P10,000.
Based on the above data,
13. The amount of petty cash fund that should be shown on the balance sheet as of August 31, 2017 is
a. P 3,300 b. P 3,800
c. P 7,100
d. P 10,000
14. The amount of cash shortage or overage is
a. P 1,050 over
b. P 1,050 under
c. P 550 over
d. P 550 under
15. The necessary audit adjusting entries at fiscal year ending includes
a. DR., Various Expenses, P1,050
b. DR., Receivable from Employees, P 2,000
c. CR., Petty Cash Fund, P 3,450
d. DR., Cash Short and Over, P 550
Problem 6- ANSWER
1.
2.
Correct amount of petty cash fund
Currencies and coins
Per count
Currencies and coins
Paid petty cash vouchers
Employee’s NSF check
Wedding gift contribution
Total per count
Cashier’s accountability:
Petty cash fund, per ledger
Wedding gift contribution
Cash overage
3.
Problem 7
P7,100
P 7,100
2,250
1,200
500
P11,050
P10,000
500
Delivery Expense
250
Office Supplies Expense
160
Employees Medicine
240
Transportation Expense
400
Repairs and Maintenance
400
Receivables from Employees
2,000
Cash Overage (or Misc. Expenses or Receivables)
Petty Cash Fund
10,500
P 550
550
2,900
You counted the petty cash fund balance of Rainbow Corporation at 9:00 o’ clock in the morning of January 2,
2018, and you obtained the following details:
Bills and coins
P2,50
0
Paid vouchers (all dated December 2017) for
Telephone
1,500
Water
1,600
Office supplies
3,700
Postage stamps
2,800
IOU’s signed by employees
Envelope containing contributions for a wedding gift to
a co-employee
3,900
1,000
Company check for fund replenishment
Unused postage stamps
Unused office supplies
15,000
1,800
1,200
You ascertained that Rainbow Corporation established a petty cash fund for P35,000.
16. The amount of the petty cash fund shortage(ovearage) as at January 2, 2018 is
a. P 4,000 over
b. P 4,000 short
c. P 3,000 over
d. P 3,000 short
17. The adjusting journal entries as at December 31, 2017 includes a total debits of
a. P 9,600 Expensesb. P 5,600 Expenses c. P 7,900 Assets
d. P 10,900 Assets
18. The correct amount of petty cash fund to be shown in the balance sheet as of December 31, 2017 is
a. P 17,500 b. P 21,500 c. P 29,400 d. P 24,500
Problem 7 Answer
1.
Total per count
Cashier’s Accountability
Petty Cash Fund, per ledger
Unused postage stamps
Unused office supplies
Wedding gift contribution
Cash shortage
2.
3.
Telephone Expense
Water Expense
Office Supplies Expense (3,700 – 1,200)
Postage Expense (2,800 – 1,800)
Prepaid Expenses (1,200 + 1,800)
Receivables from Employees (3,900 + 4,000)
Petty Cash Fund
P 35,000
P35,000
1,800
1,200
1,000
1,500
1,600
2,500
1,000
3,000
7,900
17,500
Correct amount of petty cash fund = P35,000 – P17,500 =
Cash items in the petty cash fund:
Bills and Coins
Replenishment check
Total
39,000
P 4,000
P 2,500
15,000
P17,500
P17,500
Problem 8
The cash account of Noble Company shows the following:
Date
October 30
November 2
November 4
November 15
November 20
November 21
November 30
Particulars
Balance
October Bank Charges
October Bank Credit Memo for notes
collected
NSF Checks
Loan Proceeds
November bank charges
Cash Receipts book
November 30
Cash Disbursements book
Debit
Credit
150
30,000
3,900
370,950
516,450
180
516,270
2,638,170
145,500
2,121,90
0
1,224,000 1,414,170
CASH RECEIPTS AND CASH DISBURSEMENTS BOOKS
DATE
NOVEMBER
1
2
3
4
5
8
9
10
11
12
15
16
17
18
19
22
23
23
23
26
28
28
29
29
29
TOTAL
NOV.
1
RECEIPTS
OR NO.
AMOUNT
110-120
121-136
137-150
151-165
166-190
191-210
211-232
233-250
251-275
276-300
301-309
310-350
351-390
391-420
421-480
481-500
501-525
526-555
556-611
612-630
CHECK NO.
792
DISBURSEMENTS
CHECK
AMOUNT
NO.
33,000
801
6,000
63,900
802
9,000
60,000
803
3,000
168,000
804
9,000
117,000
805
36,000
198,000
806
57,000
264,000
807
78,000
231,000
808
90,000
63,000
809
183,000
90,000
810
21,000
165,000
811
24,000
24,000
812
48,000
57,000
813
60,000
27,000
814
66,000
51,000
816
108,000
63,000
817
33,000
96,000
818
150,000
819
21,000
820
12,000
222,000
821
9,000
15,000
822
36,000
823
39,000
114,000
824
87,000
825
6,000
826
33,000
2,121,900
1,224,000
BANK STATEMENT
DEBITS
7,500
Balance
345,000
344,850
374,850
CREDITS
25,500
2
3
4
5
802
804
ERROR
CORRECTED
805
CM 16
799
DM 57 - NSF
808
803
809
DM 61-SC
813
CM 20
815
816
811
801
814
818
DM 112-SC
821
CM 36
820
9,000
9,000
243,000
33,000
63,900
60,000
243,000
8
36,000
285,000
9
36,000
10
21,150
462,000
11
3,900
231,000
12
90,000
63,000
15
3,000
16
183,000
255,000
17
180
24,000
18
60,000
57,000
19
145,500
22
18,000
23
108,000
141,000
23
24,000
23
6,000
26
66,000
96,000
28
150,000
222,000
28
360
29
9,000
15,000
29
36,000
29
12,000
TOTAL
1,059,090
2,493,900
a. CM 20 – Loan Proceeds, net of P 450 interest charges for 90 days
b. CM 16 – Correction for erroneous October bank charge
c. CM 36 – Customers’ note collected by bank in November
d. Bank balance on November 30 is P 1,776,810
19. Outstanding checks at November 30 is
a. P 441,000
b. P 459,000 c. P 477,000 d. P 487,650
20. Adjusted book balance at October 31 is
a. P 345,000
b. P 374,850 c. P 375,000 d. P 410,850
21. Adjusted bank receipts for the month of November is
a. P 2,291,400 b. P 2,297,400 c. P 2,303,400
d. P 2,321,400
22. Adjusted book disbursements for the month of November is
a. 1,210,440
b. P 1,228,440
c. P 1,246,440
d. P 1,246,620
23. Adjusted bank balance November 30
a. P 1,431,810 b. P 1,449,810
c. P 1,674,810
d. P 1,776,810
Answer – Problem 8
Unadjusted book balances
Bank Service Charge – October
Bank Service Charge – November
Notes Collected – October
Notes Collected – November
Unrecorded Disbursements (815)
October
Receipt
Disbursement November
345,000
2,297,400
1,228,230 1,414,170
(150)
(150)
360
(360)
30,000
(30,000)
36,000
36,000
18,000
(18,000)
ADJUSTED BOOK BALANCE
374,850
2,303,400
1,246,440
1,431,810
Unadjusted bank balances
Outstanding Checks – October
Outstanding Checks – November
In transit – October
In Transit – November
Error Corrected
Erroneous bank charge
ADJUSTED BOOK BALANCE
342,000
(28,650)
2,493,900
1,059,090
(28,650)
459,000
1,776,810
25,500
(25,500)
114,000
(243,000)
(36,000)
2,303,400
36,000
374,850
(459,000)
114,000
(243,000)
1,246,440
1,431,810