INTERMEDIATE ACCOUNTING Vol.1 (2021 Edition)
Conrado T. Valix, Jose F. Peralta & Christian Aris M. Valix
Chapter 1: Cash and Cash Equivalents
Problem 1-1 (IAA)
1. Accounts Receivable
Cash in Bank
Cash in Bank
Accounts Payable
Cash in Bank
Accounts Payable
Accounts Receivable
Cash in Bank
₱ 200,000
2. Cash and Cash Equivalents
₱ 200,000 Cash in Bank
₱ 3,000,000
Stale Check
(200,000)
250,000
Undelivered Check
250,000
250,000 Postdated Check
100,000
Error
(450,000)
100,000
Total Cash in Bank
₱
100,000 Time Deposit - 30 days
,
450,000
Total Cash and Cash Equivalent
₱
450,000
2,700,000
1,000,000
20,000
3,720,000
3. Money Market Placement is a short-term investment and Sinking Fund is for long-term liability. Both do not qualify as cash
equivalents. Saving deposit in closed bank is a receivable.
Problem 1-2 (IAA)
1. Accounts Receivable
Cash on Hand
Expenses (Unreplenish PCV)
Advances to Employees
Petty Cash Fund
₱ 150,000
2. Cash and Cash Equivalents
₱ 150,000 Cash on Hand
₱ 1,000,000
Postdated Check
(150,000)
10,000
Total Cash on Hand
₱
5,000
Petty Cash Fund (aft. Adj.)
15,000 Security Bank current account
PNB current account
₱
850,000
35,000
2,000,000
1,500,000
4,385,000
3. BDO current account (overdraft) is a current liability; BSP Treasury Bills 120-Days is a short-term investment; BPI Time Deposit 90 Days is a cash fund for acquisition of non-current asset; and Bonk Sinking Fund is a cash fund for long-term liability.
Problem 1-3 (IAA)
1. Accounts Receivable
Cash on Hand
Accounts Receivable
Cash on Hand
Advance to Employees
Cash Short or Over
Petty Cash Fund
₱ 100,000
2. Compute Total Cash
Cash on Hand
NSF Check
Postdated Check
150,000
Total Cash on Hand
Petty Cash Fund
Employees' IOU
Shortage
15,000
Total Petty Cash Fund
Cash in Bank
Undelivered Check
200,000
Postdated Check
Total Cash in Bank
Saving deposit
300,000 Total Cash
₱ 100,000
150,000
10,000
5,000
Cash in Bank
Accounts Payable
200,000
Cash in Bank
Accounts Payable
300,000
₱ 1,000,000
(100,000)
(150,000)
₱
750,000
50,000
(10,000)
(5,000)
35,000
4,000,000
200,000
300,000
₱
4,500,000
2,000,000
7,285,000
Problem 1-4 (PHILCPA Adapted)
1. Accounts Receivable
₱
35,000
Cash on Hand
₱
Accounts Receivable
Cash on Hand
Advance to Employees
Expenses (PCF Vouchers)
Cash Short or Over
Petty Cash Fund
15,000
2,000
12,000
1,000
Cash in Bank
Accounts Payable
25,000
Cash in Bank
Accounts Payable
45,000
Problem 1-5 (ACP)
Imprest Fund System
1 Petty Cash Fund
Cash in Bank
₱
2. Compute Total Cash
Cash on Hand
NSF Check
Postdated Check
15,000 Total Cash on Hand
Petty Cash Fund
Employees' IOU
Expenses
Shortage
15,000 Total Petty Cash Fund
Philippine Bank current account
Undelivered Check
25,000
Postdated Check
Total PB current account
City Bank current account, net
45,000 Asia saving account
Asia saving time deposit, 90 days
Total Cash on Hand
35,000
10,000
₱
Petty Cash Fund
10,000 Cash in Bank
2 No Entry
₱
200,000
(35,000)
(15,000)
₱
5,000
5,000,000
25,000
45,000
5,070,000
3,900,000
250,000
2,000,000
₱ 11,375,000
Fluctuating Fund System
₱
10,000
₱
Postage
Supplies Expense
Transportation Expense
Miscellaneous Expense
1,500
5,500
1,200
800
5,000
Transportation Expense
Miscellaneous Expense
Petty Cash Fund
Cash in Bank
Problem 1-6 (ACP)
Imprest Fund System
1 Petty Cash Fund
Cash in Bank
₱
10,000
Petty Cash Fund
10,000 Cash in Bank
14,000
1,500
3,000
1,000
3,500
10,000
10,000
1,500
3,000
Transportation Expense
1000
3500
Petty Cash Fund
Cash in Bank
19,000
Fluctuating Fund System
₱
10,000
Postage
Supplies Expense
Petty Cash Fund
Accounts Payable
Petty Cash Fund
Accounts Payable
Petty Cash Fund
Cash in Bank
14,000
14,000
3 No Entry
Transportation Expense
9,000
Petty Cash Fund
Cash in Bank
2 No Entry
4 Postage
Supplies Expense
10,000
1,500
5,500
1,200
800
Petty Cash Fund
3 Postage
Supplies Expense
150,000
20,000
(2,000)
(12,000)
(1,000)
4,500
4500
19,000
19,000
Problem 1-7 (IAA)
Imprest Fund System
May 2 Petty Cash Fund
Cash in Bank
₱
29 Postage
Supplies Expense
10,000
Fluctuating Fund System
Petty Cash Fund
₱
10,000
₱ 10,000 Cash in Bank
₱ 10,000
1,000
3,000
2,500
1,500
Transportation Expense
Miscellaneous Expense
Cash in Bank
Postage
Supplies Expense
1,000
3,000
2,500
1,500
Transportation Expense
Miscellaneous Expense
8,000
Petty Cash Fund
8,000
Petty Cash Fund
Cash in Bank
June 30 Postage
Supplies Expense
2,000
1,000
1,000
Transportation Expense
Petty Cash Fund
No Entry
No Entry
2,000
1,000
1,000
Transportation Expense
July 15 Petty Cash Fund
Postage
Supplies Expense
5,000
1,500
3,500
1,500
500
Transportation Expense
Miscellaneous Expense
Cash in Bank
Postage
Supplies Expense
1,500
3,500
1,500
500
Transportation Expense
Miscellaneous Expense
Petty Cash Fund
7,000
12,000
Petty Cash Fund
Cash in Bank
₱
10,000
₱ 10,000
30 Postage
Supplies Expense
Petty Cash Fund
Cash in Bank
2,000
5,000
10,000
Dec. 31 Postage
Supplies Expense
3,000
4,000
2,000
12,000
2022
Jan. 1 Petty Cash Fund
Postage
Supplies Expense
12,000
9,000
3,000
4,000
2,000
Miscellaneous Expense
2
No Entry
17,000
Miscellaneous Expense
Petty Cash Fund
Problem 1-9 (IAA)
2021
Dec.1 Petty Cash Fund
Cash in Bank
8,000
4,000
July 1 Petty Cash Fund
Postage
Supplies Expense
Problem 1-8 (IAA)
2021
Nov. 2 Petty Cash Fund
Cash in Bank
8,000
9,000
₱
31 Postage
Supplies Expense
Accounts Payable
Cash Short or Over
Cash in Bank
2022
Jan. 1 Petty Cash Fund
10,000
₱ 10,000
5,000
6,000
7,000
1,000
19,000
4,000
2,000
1,500
500
Advances to Employees
Selling Expense
20 Selling Expense
Miscellaneous Expense
Equipment
Cash in Bank
5,000
2,000
2,000
Transportation Expense
15 No entry
9,000
31 Selling Expense
31 Advances to Employees
Selling Expense
Transportation Expense
2,000
1,500
500
Administrative Expense
Transportation Expense
Accounts Payable
500
2,000
1,000
1,200
Petty Cash Fund
4,000
Cash in Bank
4,700
Problem 1-10 (AICPA Adapted)
Solution:
Cash in checking acoount
Cash in money market account
₱
Treasury bill, purchased November 1,
2021 maturing January 31, 2022
Total Cash and Cash Equivalent
b. P4,600,000
Problem 1-12 (PHILCPA Adapted)
Checking account at Metrobank
3,500,000
₱
₱
Foreign bank account unrestricted and in
equivalent pesos
Total Unrestrited Cash
b. 5,500,000
Problem 1-14 (AICPA Adapted)
Bank statement balance
4,600,000
3,000,000
2,500,000
₱
₱
Check drawn on Thor's account, payable to
supplier, dated and recorded on December 31,
2021 but not mailed until January 31, 2022
Total Cash
350,000
750,000
5,500,000
5,000,000
500,000
₱
5,500,000
b. 5,500,000
Problem 1-16 (AICPA Adapted)
Solution:
Cash in Bank - current account
Petty Cash Fund
Time Deposit
Saving Deposit
₱
50,000
2,500,000
1,000,000
Cash held for
compensating balance
Total Cash and Cash Equivalents
b. 9,150,000
Problem 1-18 (IAA)
Solution:
Pety Cash Fund
Current Account - First
Bank
Undelivered Check
Total
6,000,000
Problem 1-11 (IAA)
Solution:
Cash on Hand
Demand Deposit
Petty Cash Fund
Traveler Check
Manager Check
Money Order
Total Cash
d. 5,000,000
₱
₱
Problem 1-13 (PHILCPA Adapted)
Petty Cash Fund
₱
Undeposited receipts,
excluding postdated check
Cash in Bank
Deposit in bank closed by B
Total Cash
₱
d. 4,050,000
Problem 1-15 (AICPA Adapted)
Solution:
Petty Cash Fund
₱
Unreplenished Vouchers
IOU employees
Total Petty Cash Fund
Cash on Hand
Postdated Check
Total Cash on Hand
Cash in Bank - current account
Cash in Bank - payroll account
Time Deposit
Total Cash and Cash Equivalent
d. 7,440,000
Problem 1-17 (AICPA Adapted)
Solution:
Cash in bank
₱
Cash on Hand
Total Cash
₱
c. 2,375,000
500,000
4,000,000
50,000
200,000
100,000
150,000
5,000,000
50,000
1,400,000
2,500,000
100,000
4,050,000
50,000
(5,000)
(5,000)
₱
40,000
500,000
(100,000)
400,000
4,000,000
1,000,000
2,000,000
₱
7,440,000
2,250,000
125,000
2,375,000
(400,000)
₱
₱
9,150,000
50,000
₱ 4,000,000
100,000
Money Market Placement - Third Bank
Total Cash and Cash Equivalents
b. 5,150,000
4,100,000
1,000,000
₱
5,150,000
Problem 1-19 (IAA)
Solution
Undeposited collections
₱
600,000
Cash in Bank - BDO checking account
4,000,000
Cash in Bank - BDO fund for payroll
1,000,000
Cash in Bank - BDO Time deposit, 90 days
2,000,000
Cash in Bank - BDO value added tax account
450,000
Total Cash and Cash Equivalent
₱
8,050,000
d. 8,050,000
Problem 1-20 (AICPA Adapted
Solution:
Checkbook balance
Problem 1-21 (IAA)
Solution:
Check drawn on Ral's account payable to a
vendor, dated and recorded in Ral's bookson
Devember 31 2021 but not mailed until
January 10,2022
Total Cash
₱
5,000,000
300,000
₱
5,300,000
b. 5,300,000
Government treasury bills of P2,000,000 with
a 10 -year term but purchased on December ₱
31 with two months to go until maturity
2,000,000
Cash of P3,400,000 in the form of coin,
currency, saving account and checking
account
3,400,000
Commercial papers of P1,500,000 with term if
nine months but purchased on December 31
with three months to go until maturity.
Total Cash and Cash Equivalents
a. 6,900,000
Problem 1-22 (AICPA Adapted)
1. Solution:
Cash on Hand
₱
Security Bank current accou ₱ 5,000,000
Undelivered Check
100,000
Postdated Check
150,000
Manila Bank current account, net
Total Cash
₱
c. 9,150,000
2. Solution:
United Bank time deposit,90 days
Treasury Bills
Total Cash Equivalent
₱
400,000
5,250,000
3,500,000
₱
6,900,000
₱ 4,000,000
(200,000)
400,000
₱ 4,200,000
9,150,000
2,000,000
1,000,000
₱
Problem 1-23 (ACP)
1. Solution
Checkbook balance
Postdated Check
Undelivered Check
Total Cash in Bank
b. 4,200,000
1,500,000
3,000,000
2. Solution
Cash in Bank
Undeposited Collections
Petty Cash Fund
Total Cash
a. 4,645,000
₱ 4,200,000
400,000
50,000
₱ 4,650,000
a. 2,000
Problem 1-24 (PHILCPA Adapted)
Solution:
Coins and Currency
Check drawn payable to the order of Ann
Cruz, petty cash custodian, representing her
salary
Total Petty Cash Fund
₱
15,000
c. ₱
Problem 1-26 (PHILCPA Adapted)
1. Solution:
Coins and Currencies
Petty Cash vouchers for expenses
Petty Cash Fund
Cash Overage
a. 2,000 over
2. c.Miscellaneous Expense
22,000
₱
37,000
6,000
46,000
(50,000)
₱
₱
2,000
Check drawn to the order of petty cash
custodian
Total Petty Cash Fund
c. ₱
4,000
6,000
Problem 1-27 Multiple Choice (IAA)
1. d. IOU
2. d. Postdated Check
3. a. Travel Cash advance
4. b. Money Market Instrument
2,000
5. c. Overdraft can be offset against other bank account when
payable on demand and often fluctuates from positive to
overdrawn as an integral part of cash management.
46000
Cash in Bank
Cash Overage
Problem 1-25 ( PHILCPA Adapted)
Solution:
Coins and Currency
44000
2000
Problem 1-28 Multiple Choice (IAA)
6. c. Restricted Cash
7. a. Current asset with appropriate disclosure.
8. d. Mimimum deposit required to be maintained in
connection with a borrowing agreement
1. d. is so near maturity that it presents insignificant risk of
change in interest rates
2. a. from the date the investments are acquired
3. d. A bank overdraft
4. b. High grade marketable equity investments
5. d. All of these are features of cash equivalents
9. a. Fund in a bank account that cannot be spent
Problem 1-29 Multiple Choice (IAA)
1. d. Imprest system
2. b. to effectively control cash disbursements
4. c. Is debited when the petty cash funds proves out
short
10. c. Which is legally resticted and related to a shortterm loan is classified as separately as cirremt asset.
5. b. Money kept on hand for making minor disbursements of
coin and currency rather than by writing checks
3. c. When the fund is created and when the size of the
fund is created
5. b. Money kept on hand for making minor disbursements of
coin and currency rather than by writing checks