TRUE OR FALSE

1. Savings accounts are usually classified as cash on the balance sheet.

2. Certificates of deposit are usually classified as cash on the balance sheet.

3. Companies include postdated checks and petty cash funds as cash.

4. Cash equivalents are investments with original maturities of six months or less.

5. Bank overdrafts are always offset against the cash account in the balance sheet.

6. Short-term, highly liquid investments may be included with cash on the balance sheet.

7. Postdated checks and I.O.U.'s is considered cash for financial reporting purposes

SHORT PROBLEM:

1. Horvath Company has the following items at year-end:

Cash in bank $20,000
Petty cash 300
Short-term paper with maturity of 2 months 5,500
Postdated checks 1,400
Horvath should report cash and cash equivalents of
a. $20,000.
b. $20,300.
c. $25,800.
d. $27,200.

2. Marshell Company has cash in bank of $15,000, restricted cash in a separate account of
$4,000, and a bank overdraft in an account at another bank of $2,000. Marshell should report
cash of
a. $13,000.
b. $15,000.
c. $18,000.
d. $19,000.

3. At year end, Mikay Company reported cash and cash equivalent which comprise the
following,

Cash on Hand 500,000

Demand Deposit 4,000,000
Certificate of Deposit 2,000,000
Post Dated Customer Check 300,000
Petty Cash Fund 50,000
Traveler’s Check 200,000
Manager’s Check 100,000
Money Order 150,000
What total amount should be reported as cash at year end?

a. 7,000,000
b. 4,800,000
c. 6,800,000
d. 5,000,000

4. If a petty cash fund is established in the amount of $250, and contains $150 in cash and
$95 in receipts for disbursements when it is replenished, the journal entry to record
replenishment should include credits to the following accounts
a. Petty Cash, $75.
b. Petty Cash, $100.
c. Cash, $95; Cash Over and Short, $5.
d. Cash, $100.

5. Casey Company had the following account balances on December 31,2018:

Cash in Bank 2,250,000
Cash on Hand 125,000
Cash restricted for addition to
Plant and expected to be disburse in 2019 1,600,000
Cash in Bank included 600,000 of compensating balance against short term borrowing
arrangement. The compensating balance is not legally restricted as to withdrawal.
On December 31, 2018 what total cash should be reported under current asset?
a. 1,775,000
b. 2,250,000
c. 2,375,000
d. 3,975,000

6. On December 31,2018 Gerald Gali A Company reported cash of 3,350,000 with the
following details:
Undeposited collection 60,000
Cash in Bank-BDO checking account 500,000
Cash in Bank-PNB (overdraft) (50,000)
Undeposited NSF Check received from customer,
date December 1,2018 15,000
Undeposited check from a customer
dated Janary 15,2019 25,000
Cash in Bank-BDO fund for payroll 150,000
Cash in Bank- BDO saving deposit 100,000
Cash in Bank-BDO money market instrument- 90 days 2,000,000
Cash in foreign bank restricted 100,000
Cash in Bank- BDO value added tax account 450,000
Total 3,350,000

On December 31,2018 What total amount should be reported as cash ans cash
equivalent?
a. 2,910,000
b. 2,810,000
c. 2,760,000
d. 3,260,000
LONG PROBLEM:
On December 31,2018 Si Kian Naman Company provided the following data:
Cash in Bank 1,500,000
Time deposit 30 days 500,000
Money market placement due on June 30, 2019 1,000,000
Saving Deposit in closed bank 50,000
Sinking Fund for Bond payable Due June 30,2019 400,000
Petty cash fund 10,000

 The cash in Bank included customer check of 80,000 outstanding for 18 months.
 Check of 100,000 in payment of accounts payable was dated and recorded on December
31,2018 but mailed to creditors on January 15,2019.
 Check of 50,000 date January 31,2019 in payment of accounts payable was recorded and
mailed December 31,2018.
 The reporting period is the calendar year.
The cash receipt journal was held open until January 15,2019 during which time 230,000 was
collected and recorded on december31,2018.

REQUIRED:
1. Prepare adjusting entries on December 31,2018.
2. Compute the total amount of cash and cash equivalents that should be reported on
December 31,2018.