Lecture 01: Cash
Problem No. 1
Pibikit Company provided the following information at year-end comprising the cash account:
Bills and coins 400,000
Cash in bank – demand deposit 5,000,000
Cash in bank – savings deposit 1,000,000
Certificate of time deposit, 2 yrs 1,500,000
Postage stamps unused 5,000
Money order 50,000
Manager check 100,000
Traveler check 1,000,000
Bank Draft 60,000
Postdated customer check 500,000
Change Fund 22,000
Petty Cash Fund 50,000
Emergency Fund 175,000
Compute for the total amount of cash at year end.
Problem No. 2
Clay Solace Company had the following account balances on
December 31, 2021:
Cash in bank 2,500,000
Cash on hand 125,000
Cash restricted for addition to plant in 2022 1,600,000
Cash in bank included P600,000 of compensating balance against
short-term borrowing arrangement.
The compensating balance is not legally restricted as to withdrawal.
Compute for the total amount of cash at year end.
Problem No. 3
Dudas Company reported the following on its cash and cash equivalents accounts on December 31,
2021:
Cash on hand 200,000
Petty cash fund 20,000
Good Bank current account 5,000,000
Morning Bank current account No.1 4,000,000
Morning Bank current account No. 2 (overdraft) (100,000)
Afternoon Bank saving account 250,000
Afternoon Bank time deposit, 90 days 2,000,000
* Cash on hand included the following items:
1. Customer check for 35,000 returned by bank December 21, 2021 due to insufficient fund but
subsequently redeposited and cleared by the bank on January 10, 2022.
2. Customer check for P15,000 dated January 10,2022, received December 23, 2021.
* The petty cash fund consisted of the following items:
Currency and coins 5,000
IOUs from officers 2,000
Unreplenished petty cash vouchers 12,000
* Included among the checks drawn by Dudas Company against the Good Bank current account and
recorded in December 2021 were the following:
1. Check written and dated December 23, 2021 and delivered to payee on January 31, 2022, P25,000.
2. Check written December 26, 2021, dated January 30, 2022, delivered to payee on December 28, 2021,
P45,000.
Compute the total cash and cash equivalents at year end
Lecture 02: Cash Equivalents
Problem No. 1
Chelsea Company reported the following information at the end of the current year.
Investment securities of P1,000,000. These securities are share investments in entities that are traded
in the Philippine Stock Exchange.
As a result, the shares are very actively traded in the market.
Investment securities of P2,000,000. These securities are government treasury bills.
The treasury bills have a 10- year term and purchased on November 30 at which time they had two
months to go until
they mature.
Investment securities of P1,500,000. These securities are commercial papers or money market
placements.
The term of the commercial papers is three months and the instruments were purchased on December
31 at which time they had one and a half month to go until they mature.
What total amount should be reported as cash equivalents at the end of current year?
Lecture 3: Petty Cash Fund
Problem No. 1
Gupit Company closed the accounts on June 30. The entity provided the following transactions:
May 1 The entity established an imprest fund of P10,000. 30 The fund is replenished. The petty cash
items include:
Currency and coin 2,000
Postage 1,000
Supplies 3,000
Transportation 2,500
Miscellaneous expense 1,500
June 30 The fund was not replenished. The fund is composed of the following:
Currency and coin 6,000
Supplies 2,000
Postage 1,000
Transportation 1,000
July 15 The fund is replenished and increased to P15,000.
Currency and coin 3,000
Supplies 3,500
Postage 1,500
Transportation 1,500
Miscellaneous expense 500
Prepare journal entries to record the transactions under:
1. Imprest fund system
2. Fluctuating fund system.
