CASH & CASH EQUIVALENTS

PETTY CASH FUND

Problem 1. XYZ Company established a petty cash fund amounting to P45,000. The following were
determined during the count of the petty cash fund on December 31, 2016:

Coins and currencies 19,800

PCF Vouchers:
Gasoline 2,700
Medical Supplies 900
Repairs 1,350
IOUs 3,150
Check drawn payable to the order of the PCF custodian, representing her salary 13,500
Check of the president marked NSF 1,350
A sheet of paper with the names of several employees together with a contribution for 4,500
a birthday party and attached to the sheet of paper is a currency of

1. What is the correct PCF balance as of December 31, 2016? 33,300

2. What is the amount of cash shortage/overage if any? 2,250 short

Problem 2. The petty cash fund of XYZ Company showed the following for the year ended
December 31, 2016:

Bills and Coins 2,325

Certified Check of an employee, dated December 15, 2016 2,000
PCF Vouchers:
Postage Stamps 780
Office Supplies 1,150
IOUs 1,000
Replenishment check of PCF 5,650
Unused postage stamps 620
Envelop containing contributions of employees for birthday of a fellow employee, 3,500
contents intact.

The imprest balance of the PCF was determined to be P15,000.

3. What is the correct amount of PCF as of December 31, 2016? 9,975

4. What is the amount of cash shortage/overage if any? 2,095 short
 BANK RECONCILIATION

Problem 3. Sunshine Textile maintains savings and current account with East West Bank and Banco
de Oro and prepares reconciliation of the bank and book balances on a monthly basis. The June
30, 2015 reconciliation statement provided to you by the Chief Accountant revealed the following
information:

 The Cash in Bank account as of June 30, 2015 indicated a balance of P510,000.
 A debit memo dated June 29, 2015 for P412,500 was included in the bank
statement for the month of June. This represents payment of a short-term loan
granted by East West Bank inclusive of interest of P12,500. This was not recorded
as of year-end.
 Banco de Oro returned a customer’s check for P11,550 on June 28 for
insufficiency of funds. This was subsequently redeposited and cleared by the
bank on July 4, 2015.
 A transfer of funds from Banco de Oro to East West Bank amounting to P120,000
on June 30, was not recorded.
 A stale check of P6,830 which has been outstanding for more than six (6) months
was included in the list of outstanding checks. This was in payment of accounts
payable.
 Several deposits made in June 2015 covered by bank validated deposit slips
totaling P33,400 were not recorded. These represent collections from customers
whose accounts are current.
 Unreleased checks totaling P28,950 payable to suppliers were included among
outstanding checks. These were delivered on July 6, 2015.
 Interest collection from a maturing T-bill placement amounting to P13,260 which
was delivered in the afternoon of June 30 was not deposited on the same day
and neither recorded.

5. What is the amount of cash to be reported on June 30, 2015 Statement of Financial Position?
134,990
 PROOF OF CASH

PROBLEM 4. Tifa Lockhart maintains an account with HSBC. The accountant of Tifa was preparing
its proof of cash for November and December. The following information were gathered:

Outstanding checks, November P200,000

Outstanding checks, December P1,300,000
Deposit in-transit, November P1,200,000
Deposit in-transit, December P960,000
NSF checks, November P200,000
NSF checks, December P100,000
Note collected by the bank, November P400,000
Note collected by the bank, December P600,000
Balance per bank, November 30, 2015 ?
Balance per book, November 30, 2015 ?
Balance per book, December 31, 2015 P4,000,000
Balance per bank, December 31, 2015 P4,260,000
Receipts per bank P10,000,000
Receipts per book P8,800,000
Disbursements per bank P7,340,000
Disbursements per book P7,200,000

In addition to the reconciling items above, the accountant was also able to determine the
following errors:

1. During December, Tifa erroneously recorded collections from customers as P40,000 instead
of the correct amount of P400,000.
2. During December, Tifa erroneously recorded a check payment for P600,000 as P60,000.
3. During December, the bank erroneously credited the account of Tifa for P400,000. The
credit should have been to the account of Tita Lockhart.
4. During December, the bank erroneously charged the account of Tifa for P800,000. It should
have been charged to the account of Tiya Lockhart.

All items that were outstanding last month were cleared in the bank this month.

6. How much is the adjusted November 30 cash balance? 2,600,000

7. How much is the adjusted Receipts for December? 9,360,000
8. How much is the adjusted Disbursements for December? 7,640,000
9. How much is the adjusted December 31 cash balance? 4,320,000