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Assignment 1-ACFAR 1231-Cash and Cash Equivalents

Pepper Company reported various cash and cash equivalent accounts on December 31, 2020 including cash on hand, petty cash, and bank accounts. The document provides details on certain checks and cash items that require adjusting entries on the balance sheet date. King Company maintained a petty cash fund and the document outlines transactions throughout November 2020 to January 2021 including establishing the fund, expenditures, and replenishments that require journal entries to properly record the activity.

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1K views2 pages

Assignment 1-ACFAR 1231-Cash and Cash Equivalents

Pepper Company reported various cash and cash equivalent accounts on December 31, 2020 including cash on hand, petty cash, and bank accounts. The document provides details on certain checks and cash items that require adjusting entries on the balance sheet date. King Company maintained a petty cash fund and the document outlines transactions throughout November 2020 to January 2021 including establishing the fund, expenditures, and replenishments that require journal entries to properly record the activity.

Uploaded by

kakao
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ACFAR 1231

Assignment 1 – Cash and Cash Equivalents

Name: Date:
Section:

Problem 1:

Pepper Company reported the following accounts on December 31, 2020.

Cash on hand 200,000


Petty cash fund 20,000
China Bank current account 5,000,000
Makati Bank current account No. 1 4,000,000
Makati Bank current account No. 2 (overdraft) ( 100,000)
Hongkong Bank savings account 250,000
Hongkong Bank time deposits, 90 days 2,000,000

• Cash on hand included the following items:

Customer check for P35,000 returned by bank December 26, 2020 due to insufficient fund but subsequently
redeposited and cleared by the bank on January 10,2021.

Customer check for P15,000 dated January 10, 2021, received December 23,2020.

• The petty cash fund consisted if 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 Pepper Company against the China Bank current account and
recorded in December 2020 were the following.

Check written and dated December 23, 2020 and delivered to payee on January 31, 2021, P25,000.

Check written December 26,2020, dated January 30, 2021, delivered to payee on December 28, 2020,
P45,000.

Required:

1. Compute the total cash and cash equivalents.


2. Prepare adjusting entries on December 31, 2020.
Problem 2:

King Company provided the following transactions:

2020
Nov. 2 The entity established an imprest petty cash fund of P100,000.

30 An examination of the cash fund disclosed;

Currency and coin 3,000


Memoranda showing expenditures for:
Postage 2,000
Supplies 5,000

A check was drawn to replenish the fund and to increase its amount to P20,000.

Dec. 31 The fund was not replenished.

Currency and coin 11,000


Memoranda showing expenditures for:
Postage 3,000
Supplies 4,000
Deposits for 20 cases of soft drinks 2,000

2021
Jan. 2 The deposits for the 20 cases of soft drinks is collected.

31 A check was drawn to replenish the fund.

Currency and coin 1,000


Postage stamps 500

Memoranda showing expenditures since


November 30,2020 for:

Postage 5,000
Supplies 6,000
Payment 7,000

Required:

Prepare journal entries to record the transactions.

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