Practice Set: Financial Accounting - Cash and Cash Equivalents Part 2 Problem #1: LLP Co.

s accounting staff prepared the bank reconciliation for their Metrobank account number xxx2050 for the year ended December 31, 2013. Below is a copy of the bank reconciliation prepared by the staff: Books P = 600,000 (1,500) 5,000 8,000 27,500 P = 674,000 Banks P = 900,000 99,000 (325,000) P = 674,000

Unadjusted balance Reconciling items Bank charges Deposit in transit Outstanding checks Interest income from bank deposits Errors: Cash sales Receivable collection Adjusted balance How much is the cash to be presented in the Trial Balance? Prepare entries to reflect the adjustments in the LLP Co.s books. <<<<<<<<<< - >>>>>>>>>>

Problem #2: The chief accountant of xXx, Inc. is reviewing the bank reconciliation prepared by the accounting staff when he noted the following: a. A check amounting to P = 60,000 was prepared. However, this was not yet recorded in the Companys books though was released as of year-end. The check is dated week before year end and is outstanding as of year-end. b. A collection amounting to P = 88,000 was in the form of post-dated check. No entry was made upon collection. c. An error was committed by the accounting staff in recording bank charges. Instead of a debit to expense, cash was debited and the partner credit is interest income. Bank charges amounted to P = 1,300. d. Cash collection amounting to P = 69,696 was recorded as P = 96,969. e. The bank erroneously credited the Companys account for P = 700,000. This was supposed to be for another bank customer. f. The Company was advised by the Bank that a loan amounting to P = 700,000 was granted and credited to the Companys account. The accounting staff recorded this before year -end. g. The cash and cash equivalent amounted to P = 650,000. What is the unadjusted book balance? What is the unadjusted bank balance? Prepare entry to record the adjustments <<<<<<<<<< - >>>>>>>>>> Problem #3: The composition of cash and cash equivalents of Balot Co. is as follows: Coins and currencies P = 6,000 IOUs 19,000 Money markets; issued December 1, 2013; 120 days; purchased December 10, 2013 200,000 Cash in bank 500,000 Treasury shares 20,000 Cash in sinking fund 90,000 Demand deposit 20,000 What is the adjusted cash and cash equivalents of Balot Co. if its year end is December 31, 2013? What is the adjusted cash and cash equivalents of Balot Co. if its year end is March 31, 2014?

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