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The accountant of Travesty Company is in the process of preparing the companys

financial statements for the year ended December 31, 2015. He is trying to
determine the correct balance of cash and cash equivalents to be reported as a
current asset on the statement of financial position. The following items are being
considered:
Balances in the companys accounts at the Metropolitan Bank:
o Current account P81,000
o Savings account P132,600
Undeposited customer checks of P22,200 (including a customer check dated
January 2, 2016 for P3,000)
Currency and coins on hand of P3,480
Savings account at the Southern Philippines Bank with a balance of
P2,400,000. This account is being used to accumulate cash for future plant
expansion (in 2015)
Petty cash of P4,000 (currency of P1,200 and unreplenished vouchers for
P2,800)
P120,000 in a current account at the Northern Philippine Bank. This
represents a 20% compensating balance for P600,000 loan with the bank.
The company is legally restricted to withdraw the funds until the loan is due
in 2018.
Treasury bills:
o Two-month bills P90,000
o Seven-month bills P120,000
Time deposit P100,000
Question: What is the correct balance of cash and cash equivalents to be reported
in the current assets section of the statement of financial position?

The auditor of Greenshield Inc. Examined the petty cash fund immediately after
the close of the business, July 31, 2015, the end of the companys natural business
year. The petty cash custodian presented the following during the count:

Currency
Petty cash vouchers:
Postage
Office supplies expense
Transportation
Computer repairs
Advances to office staff

P1,650

A check drawn by Edward


payable to the petty cash
custodian

7,200

420
900
340
800
1,500

300
Postage stamps

1,000
Employees check, returned by the
bank, marked NSF

1,890
An envelope containing currency
of P1,890 for a gift to a retiring
employee

P16,000
1.) How much is the petty cash shortage or overage?
2.) What is the adjusted balance of the petty cash fund at July 31, 2015?

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