Problems Exercises : Cash and Equivalents, Bank Reconciliation

1. Noise Co. had the following balances on December 31, 20x1:

Cash in checking account ₱35,000
Cash in money market account 75,000
Treasury bill, purchased 11/1/20x1, maturing 1/31/20x2 350,000
Treasury bill, purchased 12/1/20x1, maturing 3/31/20x2 400,000

What amount should Noise Co. report as cash and cash equivalents in its December 31, 20x1 statement of financial
position?
2. The records of Kapiz Co. show the following balances on December 31, 20x1:
Cash on hand ₱ 400,000
Cash in Bank – current account 1,200,000
Cash in Bank – peso savings deposit 5,000,000
Cash in Bank – dollar deposit (unrestricted) $ 100,000
Cash in Bank – dollar deposit (restricted) 250,000
Cash in 3-month money-market account ₱ 500,000
3-month unrestricted time deposit $ 20,000
Treasury bill, purchased 11/1/20x1, maturing 2/14/20x2 ₱1,600,000
Treasury bond, purchased 3/1/20x1, maturing 2/28/20x2 1,000,000
Treasury note, purchased 12/1/20x1, maturing 2/28/20x2 400,000
Unused Credit Line 4,000,000
Redeemable preference shares, purchased 12/1/20x1, due on 3/1/20x2 740,000
Treasury shares, purchased 12/1/20x1, to be reissued on 1/5/20x2 200,000
Sinking fund 400,000

Additional information:
• Cash on hand includes a ₱40,000 check payable to Kapiz Co. dated December 29, 20x1.
• During December 20x0, check amounting to ₱30,000 was drawn against the Cash in bank - current account in payment
of accounts payable. The check remains outstanding as of December 31, 20x1.
• The Cash in Bank – peso savings deposit includes ₱800,000 security bond on a pending labor case, in favor of a previous
employee. The establishment of the bond is mandated by a court of law.
• The Cash in Bank – peso savings deposit also includes a compensating balance amounting to ₱500,000 which is not
legally restricted.
• The Cash in Bank – dollar deposit (unrestricted) account includes interest of $4,000, net of tax, directly credited to
Kapiz Co.’s account. The exchange rate at year-end is $1 is to ₱45.

How much is the cash and cash equivalents to be reported in the 20x1 financial statements?

3. In preparing its bank reconciliation on December 31, 20x1, Sun Co. has made available the following data:
Balance per bank statement, 12/31/x1 38,075
Deposit in transit, 12/31/x1 5,200
Outstanding checks, 12/31/x1 6,750
Amount erroneously credited by the bank to Sun's
account, 12/28/x1 400
Bank service charges for December 75

Sun's adjusted cash in bank balance on December 31, 20x1 is

4. In preparing its August 31, 20x3 bank reconciliation, Morning Co. has made available the following information:
Balance per bank statement, 8/31/x3 18,050
Deposit in transit, 8/31/x3 3,250
Return of customer’s check for insufficient funds, 8/31/x3 600
Outstanding checks, 8/31/x3 2,750
Bank service charges for August 100

What is the correct cash balance of Morning on August 31, 20x3?

Use the following information for the next three questions:

The accounting records and bank statement of Entity A show the following information:
 SUBSIDIARY LEDGER
CASH IN BANK - BPI CURRENT ACCOUNT
Date Description Debit Credit Balance
6/1 Bal. forwarded 881,000
6/11 Check #1113 130,800 750,200
6/15 Check #1114 220,000 530,200
6/16 Deposit 295,800 826,000
6/22 Deposit 670,000 1,496,000
6/24 Check #1115 80,000 1,416,000
6/28 Check #1116 380,000 1,036,000
6/29 Deposit 160,000 1,196,000

METROBANK
BANK STATEMENT - ENTITY A

Description Debit Credit Balance

Date
6/1 Bal. forwarded 881,000
6/10 Deposit 350,000 1,231,000
6/15 Payment 2,000 1,229,000
6/15 Check #1114 220,000 1,009,000
6/16 Deposit 295,800 1,304,800
6/20 Payment 50,000 1,254,800
6/22 Deposit 670,000 1,924,800
6/24 Check #1115 80,000 1,844,800
6/26 Check #1113 130,800 1,714,000
6/28 Deposit 410,000 2,124,000

Additional information:
• The payments of ₱2,000 and ₱50,000 shown on the bank statement pertain to the cost of checkbook requested from
the bank and the monthly amortization of a bank loan, respectively. The loan payment includes payment for
interest of ₱8,000.
• Deposits shown on the bank statement but not on the cash ledger represent collections of accounts receivable.
5. How much is the deposit in transit?
6. How much is the credit memo?
7. How much is the adjusted cash balance?

The next three items are based on the following information:

Taken from the records of Girly Co. are the following:

Balance per books, October 31 4,440

Total Credits per books, November 8,320
Balance per books, November 30 2,400
Balance per bank statement, October 31 5,520
Balance per bank statement, November 30 4,560
Total Debits per bank statement, November 2,800
Loan proceeds directly credited to Girly’s account in
October 1,200
Collection of receivable directly credited to Girly’s
account in November – not yet recorded in the books 600
NSF checks returned in October 900

NSF checks returned in November - not yet recorded in

the books 300
Check received from a customer amounting to ₱1,800
was recorded in the books in October as 180
Overstatement in book debit in October 800
Overstatement in book credit in November 300
 Understatement in bank debit in October 290
Overstatement in bank credit in October 370
Deposit amounting to ₱1,050 was recorded by
the bank in November as 150

Deposits in transit – October 31 4,500

Outstanding checks – October 31 3,800

8. How much are the deposits in transit on November 30?

9. How much are the outstanding checks on November 30?
10. How much is the adjusted balance of cash on November 30?

Use the following information for the next three questions:

Kriselda Co. has the following information for the months of June and July.
June 30 July 31
Book balance ? 9,300
Book debits 30,700
Book credits 27,000
Bank balance 10,200 16,800
Bank debits 21,300
Bank credits ?
Notes collected by bank 2,250 3,000
Bank service charge 20 100
NSF checks 880 1,400
Understatement of recorded cash
collections 1,900 1,200
Deposit in transit 6,000 11,250
Outstanding checks 9,750 17,850
Loan amortization of Kristeta
Corp. erroneously debited to
Kriselda Co.’s account 2,400 1,800

11. How much is the adjusted cash receipts in July?

12. How much is the adjusted cash disbursements in July?
13. How much is the adjusted cash balance as of July 31?