1.

Cowbell Company had the following account balances on December 31, 2016:
Petty cash fund 50,000
Cash in bank - current account 4,000,000
Cash in bank - payroll account 1,200,000
Cash in bank - sinking fund 2,000,000
Cash on hand 500,000
Cash in bank - restricted account for plant addition
and expected to be disbursed in 2017 1,500,000
Treasury bills 1,000,000

 The petty cash fund included unreplenished December 2016 petty cash expense
vouchers P5,000 and employee IOU P5,000.
 The cash on hand included a P100,000 customer check payable to Cowbell dated
January 15, 2017.
 In exchange for a guaranteed line of credit, the entity has agreed to maintain a
minimum balance of P200,000 in the unrestricted current bank account.
 The sinking fund is set aside to settle a bond payable that is due on June 30, 2017.

What total amount should be reported as cash and cash equivalents on December 31, 2016?
a. P8,640,000 b. P7,440,000
c. P7,640,000 d. P5,640,000

2. Arya Company kept all cash in a checking account. An examination of the accounting
records and bank statement for the month of June revealed the following information:
* The cash balance per book on June 30 is P8,500,000.
* A deposit of P1,000,000 that was placed in the bank's night depository on June 30 does not
appear on the bank statement.
* The bank statement shows on June 30, the bank collected note for Arya and credited the
proceeds of P950,000 to the entity's account.
* Checks outstanding on June 30 amount to P300,000.
*Arya discovered that a check written in June for P200,000 in payment of an account payable,
had been recorded in the entity's records as P20,000.
*Included with the June bank statement was NSF check for P250,000 that Arya had received
from a customer on June 26.
* The bank statement shows a P20,000 service charge for June.
What amount should be reported as cash in bank on June 30?
a. P9,000,000 b. P8,300,000
c. P9,360,000 d. P9,180,000

3. In reconciling the cash balance on December 31 with that shown in the bank statement,
Pam Company provided the following information:
*Balance per bank statement 4,000,000
*Balance per book 2,700,000
*Outstanding checks 600,000
*Deposit in transit 475,000
*Service charge 10,000
*Proceeds of bank loan, December 1,
discounted for 6 months at 12%, not recorded on Pam Company's books 940,000
*Customer check charged back by bank for absence of counter signature 50,000
*Deposit of P100,000 incorrectly recorded by bank as 10,000
*Check of Prim Company charged by bank against Pam account 150,000
*Customer's note collected by bank in favor of Pam Company:
Face 400,000
Interest 40,000
Total 440,000
Collection fee 5,000 435,000
*Erroneous debit memo of December 28,
to charge Pam account with settlement of bank loan 200,000
*Deposit of Prim Company credited to Pam account 300,000

What is the adjusted cash in bank on December 31?

a. P4,315,000 b. P3,925,000
c. P3,075,000 d. P4,015,000

4. Champ Company presented the following bank reconciliation for the month of
November:
Balance per bank statement, November 30 3,600,000
Add: Deposit in transit 800,000
 4,400,000
Less: Outstanding checks 1,200,000
Bank credit recorded in error 200,000 1,400,000
Balance per book, November 30 3,000,000

Data per bank statement for the month of December follow:

*December deposits, including note collected of P1,000,000 for Champ 5,500,000
*December disbursements, including NSF customer
check P350,000 and service charge P50,000 4,400,000

All items that were outstanding on November 30 cleared through the bank in December,
including the bank credit.

In addition, checks amounting to P500,000 were outstanding and deposits of P700,000 were in
transit on December 31.

1. What is the adjusted cash in bank on December 31?

a. P4,700,000 b. P4,900,000
c. P4,500,000 d. P3,200,000

2. What is the cash balance per ledger on December 31?

a. P4,100,000 b. P4,900,000
c. P4,700,000 d. P4,300,000

3. What is the amount of cash receipts per book in December?

a. P5,400,000 b. P4,400,000
c. P5,500,000 d. P6,400,000

4. What is the amount of cash disbursements per book in December?

a. P3,700,000 b. P3,300,000
c. P3,100,000 d. P3,500,000

5. When examining the accounts of Brave Company, it is ascertained that balances relating
to both receivables and payables are included in a single controlling account called
"receivables control” with a debit balance of P4,850,000. An analysis of the make-up of
this account revealed the following:
 Debit Credit
Accounts receivable – customers 7,800,000
Trade accounts receivable – officers 500,000
Debit balances – creditors 300,000
Postdated checks from customers 400,000
Subscriptions receivable 800,000
Accounts payable for merchandise 4,500,000
Credit balances in customers' accounts 200,000
Cash received in advance from customers 100,000
Expected bad debts 150,000
*After further analysis of the aged accounts receivable, it is determined that the allowance for
doubtful accounts should be P200,000.
1. What is the net realizable value of accounts receivable?
a. P8,000,000 b. P8,500,000
c. P8,300,000 d. P8,550,000

2. What is the balance of accounts payable?

a. P4,200,000 b. P4,700,000
c. P4,500,000 d. P4,800,000

6. Alpha Company sold goods to wholesalers on terms 2/15, net 30. The entity had no cash
sales but 50% of the customers took advantage of the discount. The entity used the
gross method of recording sales and accounts receivable.

An analysis of the trade accounts receivable at year-end revealed the following:

Age Amount Collectible

0 - 15 days 2,000,000 100%
16 - 30 days 1,400,000 95%
31 - 60 days 400,000 90%
Over 60 days 200,000 50%
4,000,000
1. What amount should be reported as allowance for sales discount at year-end?
a. P20,000 b. P32,400
c. P33,500 d. P40,000

2. What amount should be reported as allowance for doubtful accounts at year-end?

a. P230,000 b. P210,000
c. P190,000 d. P200,000

3. What is the net realizable value of accounts receivable?

a. P4,000,000 b. P3,750,000
c. P3,770,000 d. P3,790,000