Question

Hello please help me to answer this. Please provide clear solutions. Thank you! Image transcription textProblem 1-10 (AICPA Adapted)

Tranvia Company revealed the following information on
December 31, 2021:
Cash in checking account
350,000
Cash in money market account
750,000
Treasury bill, purchased November 1, 2021
maturing January 31, 2022
3,500,000
Time deposit purchased December 1, 2021
maturing March 31, 2022
4,000,000
What amount should be reported as cash and cash equivalents
on December 31, 2021?
a. 1,100,000
b. 3,850,000
C. 4,600,000
d. 8,600,000
Problem 1-11 (IAA)
At year-end, Myra Company reported cash and cash
equivalents which comprised the following:
Cash on hand
500,000
Demand deposit
4,000,000
Certificate of deposit
2,000,000
Postdated customer check
300,000
Petty cash fund
50,000
Traveler check
200,000
Manager 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... Show more Image transcription textProblem 1-12 PHILCPA Adapted)
Starex Company provided the following information at
year-end:
Checking account at Metrobank
Employee's postdated check
3,000,000
Foreign bank account unrestricted and in equivalent pesos 2,500,000
120,000
IOU from company president
NSF customer check
500,000
Petty cash fund, expense receipts P40,000
100,000
Postage stamps
50,000
Treasury bonds
10,000
Value added tax account
500,000
1,500,000
What amount should be reported as unrestricted cash?
a. 7,050,000
b. 5,500,000
c. 7,010,000
d. 5,510,000
Problem 1-13 (PHILCPA Adapted)
At year-end, ABC Company reported cash account per ledger
at P4, 700,000 which consisted of the following:
Petty cash fund
50,000
Undeposited receipts, including a postdated customer
check for P100,000
1,500,000
Cash in bank
2,500,000
Deposit in bank closed by BSP
500,000
Vouchers paid out of collections, not yet recorded
150,000
IOUs signed by employees, taken from collections
100,000
4,800,000
What amount should be reported as cash at year-end?
a. 3,750,000
b. 3,950,000
c. 4,250,000
d. 4,050,000... Show more

Answer 1

Problem 1-10: The amount reported as cash and cash equivalents on December 31, 2021, is 1,100,000.
Problem 1-11: The total amount reported as cash at year-end is 4,800,000.
Problem 1-12: The amount reported as unrestricted cash is 7,010,000.
Problem 1-13: The amount reported as cash at year-end is 3,950,000.

In Problem 1-10, the amount that should be reported as cash and cash equivalents on December 31, 2021, is 1,100,000. This includes the cash in the checking account ($350,000), cash in the money market account ($750,000), and the treasury bill that will mature on January 31, 2022 ($3,500,000).

In Problem 1-11, the total amount that should be reported as cash at year-end is 4,800,000. This includes the cash on hand ($500,000), demand deposit ($4,000,000), certificate of deposit ($2,000,000), postdated customer check ($300,000), petty cash fund ($50,000), traveler check ($200,000), manager check ($100,000), and money order ($150,000).

In Problem 1-12, the amount that should be reported as unrestricted cash is 7,010,000. This includes the checking account at Metrobank ($3,000,000), foreign bank account in equivalent pesos ($2,500,000), NSF customer check ($500,000), petty cash fund ($40,000), and postage stamps ($50,000).

In Problem 1-13, the amount that should be reported as cash at year-end is 3,950,000. This includes the petty cash fund ($50,000), undeposited receipts ($1,500,000), cash in bank ($2,500,000), and IOUs signed by employees ($100,000).

Remember to always carefully analyze the information provided and identify the items that should be considered as cash and cash equivalents.

Answer 2

Problem 1-11

d. 8,600,000

How to explain

Cash and cash equivalents are highly liquid assets that can be readily converted into cash within a short period, typically three months or less. In this case, all of the items listed meet this definition.

Therefore, the total amount that should be reported as cash and cash equivalents on December 31, 2021, is $8,600,000.

Problem 1-12

b. 5,500,000

Unrestricted cash is cash that is readily available for use in the company's operations. In this case, the following items should be included in unrestricted cash:

Checking account at Metrobank: P3,000,000

Foreign bank account unrestricted and in equivalent pesos: P2,500,000

Employee's postdated check: P120,000

Petty cash fund: P40,000

Postage stamps: P50,000

The following items should not be included in unrestricted cash:

IOU from company president: This is a receivable, not cash.

NSF customer check: This is a receivable that is likely to be uncollectible.

Treasury bonds: These are long-term investments, not cash.

Value-added tax account: This is a liability, not cash.

Therefore, the total amount that should be reported as unrestricted cash is P5,510,000.

Problem 1-13

c. 4,250,000

Cash is the amount of cash on hand and in the bank that is readily available for use in the company's operations. In this case, the following items should be included in cash:

Petty cash fund: P50,000

Undeposited receipts: P1,500,000

Cash in bank: P2,500,000

The following items should not be included in cash:

Bank deposit closed by BSP: This is a receivable, not cash.

Vouchers paid out of collections, not yet recorded: These are expenses that have been paid but not yet recorded, not cash.

IOUs signed by employees, taken from collections: These are receivables, not cash.

Therefore, the total amount that should be reported as cash at year-end is P4,250,000.