FINANCIAL ACCOUNTING & REPORTING FIRST PRE-BOARD EXAMINATION (ANSWERS & SOLUTIONS/CLARIFICATIONS}- ReSA - THE REVIEW SCHOOL OF ACCOUNTANCY

FINANCIAL ACCOUNTING & REPORTING FIRST PRE-BOARD EXAMINATION (ANSWERS & SOLUTIONS/CLARIFICATIONS}- ReSA - THE REVIEW SCHOOL OF ACCOUNTANCY On December 31, 2020, the cash account of Gambit Company shows the following composition: Petty cash fund, P180,000; Cash in bank (payroll fund), P2,000,000; Interest and dividend fund, P250,000; Tax fund, P120,000; Cash in bank (current account), P3,000,000; Certificate of deposit (terms 90 days), P1,000,000; Certificate of deposit (terms 180 days), P1,500,000; Cash in foreign bankrestricted, P500,000; Money market fund, (60 days), P500,000; Money market funds (6 months), P900,000; Customer’s check dated February 15, 2021, P60,000; Customer’s check dated December 30, 2020 returned for lack of funds, P40,000; A 30-day BSP treasury bill, P1,000,000; A 3-year BSP treasury bill acquired three months prior to maturity, P1,200,000; Sinking fund cash, P800,000;Contingent fund, P900,000 Fund for the acquisition of fixed asset, P500,000; Travelers’ checks, P60,000; and Cashiers’ checks, P100,000. What is the correct cash and cash equivalents balance to be reported by Gambit Company on December 31, 2020? D a. P 7,810,000 b. P 8,210,000 c. P 8,910,000 d. P 9,410,000 2. The balance sheet of Alaska Company as of December 31, 2021 shows Cash of P17,500. It was found to include some of the following items: Postal money orders from customers P 2,400 Notes receivable in the possession of a collection agency 3,200 Receipts for expense advances for the account of credit suppliers 600 Customers’ postdated checks, returned by the bank marked “NSF” 1,800 Traveler’s check 500 Currencies and coins on hand 600 Checks in payment of accounts not yet delivered to payee 6,000 PCF (P160 in currency and P840 in expense receipts) 1,000 What is the correct cash balance? B a. P 9,660 b. P 11,060 c. P 12,860 d. P 14,260 3. The Petty Cash Fund of GDM Company has an Imprest balance of P10,000. The following items are found in its drawer on December 31, 2021: Currencies and coins 10 pcs. @ P 100 ? 8 pcs. @ P 50 ? 30 pcs. @ P20 ? Unreplenished paid vouchers for expenses and loans dated Dec. 16-31, 2021: Supplies 1,200 Loan to office director 1,800 Unused supplies 200 Check drawn by office manager dated 12/30/21 2,500 Check drawn by employee dated 1/18/22 1,500 Check drawn by customer dated 12/25/21 1,000 Envelope containing cash donations for the departedparent of one employee, (no currencies attached) 500 How much is the correct amount of petty cash fund on Dec. 31, 2021? A a. P 4,000 b. P 2,000 c. P 1,500 d. P 4,500 4. What is the amount of shortage or overage? C a. P 1,000 short b. P 1,000 over c. P 1,500 short d. P 1,500 over