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Cash and Cash Equivalents Analysis

The document provides information about cash and cash equivalents reporting for December 31, 2015. It lists the total cash and cash equivalents as $5,980,000 and provides details on petty cash, bank accounts, and time deposits that make up this total. It also addresses adjusting entries for several cash accounts and specifies the correct cash balance of $270,000 and total current assets of $1,328,000 for the December 31, 2015 balance sheet.

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LorenaTuazon
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616 views1 page

Cash and Cash Equivalents Analysis

The document provides information about cash and cash equivalents reporting for December 31, 2015. It lists the total cash and cash equivalents as $5,980,000 and provides details on petty cash, bank accounts, and time deposits that make up this total. It also addresses adjusting entries for several cash accounts and specifies the correct cash balance of $270,000 and total current assets of $1,328,000 for the December 31, 2015 balance sheet.

Uploaded by

LorenaTuazon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
  • Cash and Cash Equivalents on December 31, 2015: Analyzes items that should be reported as cash and cash equivalents, providing solutions for financial accounting determinations on a specific date.
  • Cash Equivalents Recognition: Addresses the accounting procedures for recognizing cash equivalents, detailing specific financial statement positions and adjustments.
  • Financial Position on December 31, 2015: Concludes with the presentation of cash and cash equivalents in the balance sheet, emphasizing accurate financial position reporting.
  • Cash Balance Adjustments: Explores adjustments needed for reported cash balances, incorporating factors like bank notes and reconciliation.

FINANCIAL ACCOUNTING AND REPORTING PROBLEMS:

CASH AND CASH EQUIVALENTS

1. What total amount should be reported as cash and cash equivalent on December 31, 2015? 5,980,000

Solution:
Petty cash fund (50,000 – 15,000 – 5,000) P30,000
Current account – Metrobank Bank (4,000,000 - 200,000 3,950,000
+ 150,000)
Time deposit – Finance Bank 2,000,000
Cash and cash equivalents 5,980,000

FOR ITEMS 2 to 5:

2. The correct amount to be recognized as Cash in Bank BDO is: 1,575,000


3. The correct amount to be recognized as Cash in Bank BPI is: 1,500,000
4. The correct amount to be recognized as Cash in Bank MBTC is: 1,465,000
5. What is the amount of cash in Mark’s December 31, 2012 statement of financial position? P4,540,000

Solution:
Cash in bank BDO P 1,500,000
add: Undelivered check recorded P 45,000
Postdated check issued 30,000 75,000 P 1,575,000

Cash in bank BPI


BPI account # 10001 P 1,450,000
BPI account # 10002 P ( 250,000)
add: postdated check issued 300,000 50,000 1,500,000

Cash in bank MBTC (per bank statement) P 1,450,000


add: Deposits in transit 75,000
less: Outstanding checks 60,000 1,465,000

Cash in bank - adjusted P 4,540,000

For items 6 to 10:

6. How much is the adjusted cash on hand at December 31, 2015?: P40,000

7. How much is the adjusted petty cash fund balance at December 31, 2015?: P5,000

8. How much is the adjusted cash in bank balance at December 31, 2015?: P225,000

9. How much is the correct cash balance on December 31, 2015?: P270,000

10. How much is the total current assets at December 31, 2015?: P1,328,000

11. The cash and cash equivalents to be shown on the December 31, 2015 balance sheet is: P2,910,000

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