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FT2 CASH TO RECEIVABLES KEY Final 100% Correct;Far Eastern University
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FT2 CASH TO RECEIVABLES KEY Final 100% Correct;Far Eastern University
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Far Eastern UniversityINSTITUTEOF ACCOUNTS, BUSINESS AND FINANCE
Department of Accountancy & Internal Auditing
INTERMEDIATE ACCOUNTING 1
MIDTERM GRADING PERIOD
FORMATIVE/DIAGNOSTIC ASSESSMENT – CASH TO RECEIVABLE
GUIDE IN YOUR LEARNING PROGRESS
Bloom's taxonomy is a set of three hierarchical models used to classify educational learning objectives
into levels of complexity and specificity. The three lists cover the learning objectives in cognitive, affective
and sensory domains.
https://en.wikipedia.org/wiki/Bloom%27s_taxonomy
In COGNITIVE DOMAIN, The six levels are: (1) knowledge, (2) comprehension, (3) application, (4)
analysis, (5) synthesis, and (6) evaluation (see Figure below). Bloom's taxonomy provides a systematic
way of describing how a learner's performance grows in complexity when mastering academic tasks.
https://www.researchgate.net/figure/Six-levels-in-Blooms-taxonomy_fig1_230877207
Bloom's Revised Taxonomy by Andreson and Krathwol. There are six levels of cognitive learning
according to the revised version of Bloom's Taxonomy. Each level is conceptually different. The six levels
are remembering, understanding, applying, analyzing, evaluating, and creating.
, TOPIC - CASH
MULTIPLE CHOICE QUESTIONS/STRAIGHT PROBLEMS
Problem 1 (Adapted):
The following pertains to Kerry Corporation on December 31, 2018:
Postage stamps P 1,000
Employees postdated check 4,000
IOUs from controller’s sister 10,000
Credit memo from a vendor for a purchase return 20,000
Traveler’s check 50,000
Postal Money Order 30,000
Petty Cash Fund (P 4,000 in currency and expense receipts for P 6,000) 10,000
Treasury bills, due 3/31/2019 (purchased 12/31/2018) 200,000
Treasury bills, due 1/31/2019 (purchased 1/31/2018) 300,000
Listed stock held as temporary investments 15,000
Current account at Metrobank 2,000,000
Current account at BPI (100,000)
Payroll account 500,000
Foreign Bank account – restricted (in equivalent pesos) 1,000,000
Treasury Warrants 300,000
How much cash and cash equivalents should Kerry Corp. report on the December 31, 2018 statement of financial
position?
A. P 3,084,000
B. P 2,790,000
C. P 2,784,000
D. P 2,704,000
SOLUTION:
Items Amount Remarks
Postage stamps - Supplies
Employees postdated check - Advances to Employees
IOUs from controller’s sister - Advances to Officers
Credit memo from a vendor for a purchase return - Accounts Payable/PRA
Traveler’s check 50,000
Postal Money Order 30,000
Petty Cash Fund 4,000 P 6,000 – Expenses
Treasury bills, due 3/31/2019 (purchased 12/31/2018) 200,000 Cash Equivalents - 3 months
Treasury bills, due 1/31/2019 (purchased 1/31/2018) - Short-term investment
Listed stock held as temporary investments - Trading Securities
Current account at Metrobank 2,000,000
Current account at BPI - Bank overdraft – current liability
Payroll account 500,000
Foreign Bank account – restricted (in equivalent pesos) - Noncurrent asset
Treasury Warrants 300,000
Cash and Cash Equivalents, 12/31/2018 3,084,000
Problem 2 (Adapted)
Total cash and cash equivalent of P 6,325,000 reported by Kristine Co. on December 31, 2018 include the
following information:
a) Two certificates of deposits, each totaling P 500,000 have a maturity of 120 days.
b) A check that is dated January 12, 2019 in the amount of P 125,000.
c) A commercial paper of P 2,100,000 which is due in 90 days.
d) Currency and coins on hand amounted to P 7,700.
Kristine Company has agreed to maintain a cash balance of P 500,000 in one of its banks at all times to ensure
future credit availability (this amount is legally restricted as to withdrawal and was included in the above balance).
How much is the correct amount of cash and cash equivalents that Kristine should report in its December 31,
2018 statement of financial position?
A. P 5,700,000
,D. P 6,200,000
SOLUTION:
Items Amount Remarks
Cash and cash equivalents, 12/31/2018, unadjusted 6,325,000
Two certificates of deposits, totaling P 500,000 Beyond three months to
have a maturity of 120 days (500,000) classify as cash equivalents
A check that is dated January 12, 2019 (125,000) Deducted during issuance
Compensating balance that is legally restricted (500,000)
Cash and Cash Equivalents, 12/31/2018 5,200,000
Problem 3 (Adapted)
The cash account of Ria on December 31, 2018 had a balance of P 151,000 and it consists of the following:
Bills and coins on hand P 52,780
Traveler’s check 22,400
Credit memo from suppliers for purchase returns 6,500
Postage stamps 120
Petty cash including paid cash vouchers of P 1,650 2,000
Balance in savings account with a bank closed by the BSP 36,000
Customer’s check dated January 15, 2019 8,000
Money order 800
IOU of an employee 400
Checking account in BPI 22,000
Total P 151,000
The correct cash and cash equivalents balance on December 31, 2018 is
A. P 98,900
B. P 98,730
C. P 97,530
D. P 98,330
SOLUTION:
Items Amount Remarks
Bills and coins on hand 52,780
Traveler’s check 22,400
Credit memo from suppliers for purchase returns - Accounts Payable/PRA
Postage stamps - Supplies
Petty cash including paid cash vouchers (P 2,000 – P 1,650) 350 P 1,650 - Expenses
Balance in savings account with a bank closed by the BSP - Noncurrent assets
Customer’s check dated January 15, 2019 - Accounts Receivable
Money order 800
IOU of an employee - Advances to Employees
Checking account in BPI 22,000
Cash and Cash Equivalents, 12/31/2018 98,330
Problem 4 (Adapted)
Assume the following data of Dianne Corporation of its cash and short-term, highly liquid investments for
December 31, 2018:
Cash on Hand 80,000
Checking Account No, 143 - BPI 200,000
Checking Account No. 155 - BPI (30,000)
Securities Date Acquired Maturity Date Amount
120-day Certificate of Deposit 12/10/2018 01/31/2019 P 600,000
BSP Treasury Bills (No. 1) 11/30/2018 04/30/2019 5,000,000
BSP Treasury Bills (No. 2) 10/31/2018 01/20/2019 1,000,000
180 days Commercial Paper 12/01/2018 06/20/2019 1,400,000
Money Market Funds 11/21/2018 02/10/2019 2,000,000
The correct cash and cash equivalents balance on December 31, 2018 is
A. P 3,850,000
B. P 3,880,000
C. P 5,250,000
D. P 5,280,000
, SOLUTION:
Cash on Hand 80,000
Checking Account No, 143 - BPI 200,000
Checking Account No. 155 - BPI (30,000)
Cash Equivalents 3,600,000
Total Cash and Cash Equivalents, 12/31/2018 3,850,000
Supporting computation for cash equivalents at 12/31/2018:
Securities Date Acquired Maturity Date Amount
120-day Certificate of Deposit 12/10/2018 01/31/2019 P 600,000
BSP Treasury Bills (No. 2) 10/31/2018 01/20/2019 1,000,000
Money Market Funds 11/21/2018 02/10/2019 2,000,000
CCE, 12/31/2018 P 3,600,000
Problem 5 (Adapted)
The December 31, 2018 trial balance of Agee Company includes the following accounts:
Petty Cash Fund P 70,000
Current account – Metrobank 4,000,000
Current account – BPI (overdraft) (250,000)
120-day money market placement – RCBC 1,000,000
Time Deposit - PNB 2,000,000
Additional information:
The petty cash fund includes unreplenished December 2018 petty cash expense vouchers for P 15,000 and
an employee check for P 5,000 dated January 31, 2019.
A check of P 100,000 was drawn against Metrobank current account dated and recorded December 27, 2018
but delivered to payee on January 10, 2019.
The PNB time deposit is set aside for land acquisition in early January, 2019.
What should be reported as “cash and cash equivalents” on December 31, 2018?
a) P 5,130,000
b) P 5,150,000
c) P 4,150,000
d) P 4,880,000
SOLUTION:
Items Amount Remarks
Petty Cash Fund 50,000 Advances to Employees – P 5,000
(P 70,000 – P 15,000 – P 5,000) Expenses – P 5,000
Current account – Metrobank 4,100,000 Undelivered Check – P 100,000. The entry
(P 400,000 + P 100,000) made is debit – A/P and credit - Cash
Current account – BPI (overdraft) Bank overdraft – Current Liability – P 250,000
120-day money market placement – RCBC - Short-term investment – P 1,000,000 (more
than three months term)
Time Deposit - PNB - Fund Investment – P 2,000,000
Cash and Cash Equivalents, 12/31/2018 4,150,000
Problem 6 (Financial Accounting IFRS edition by Stice, Stice, et. al)
Presented below are the accounting information for Bend Company at January 31, 2017:
1. Cash per accounting records at January 31 amounted to P 228,909; the bank statement on the same
date showed a balance of P 204,008.
2. The cancelled checks returned by the bank included a check written by DeVoe Company for P 6,987 that
had been deducted from bend’s account in error.
3. Deposits in transit as of January 31, 2017 amounted to P 33,442.
4. The following amounts were adjustments to Bend Company’s account on the bank statements:
a. Service Charge of P 64
b. An NSF check of P 4,100.
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