A R T S
Accounting Review and Tutorial Services
San Isidro, Nueva Ecija
P1. – 1013 up to P1. – 1017 jloesguerra
The following data pertain to Lincoln Corporation on December 31, 2011:
Current account at Metrobank
P 1,800,000
Current account at Allied Bank
(100,000)
Payroll account
500,000
Foreign bank account (in equivalent
pesos)
800,000
Savings deposit in a closed bank
150,000
Postage Stamps
1,000
Employee’s post dated check
4,000
IOU from employees
10,000
Credit Memo from a vendor for purchase
return
20,000
Traveler’s check
50,000
Money Order
30,000
Petty Cash fund (P4,000 in currency and
expense receipts for P6,000)
10,000
Pension Fund
2,000,000
DAIF check of customer
15,000
Customer’s check dated 1/1/12
80,000
Time Deposit – 30 days
200,000
Money market placement (due 6/30/12)
500,000
Treasury bills, due 3/31/12 (purchased
12/31/11)
200,000
Treasury bills, due 1/31/12 (purchased
2/1/11)
300,000
1. The cash and cash equivalents as of December 31, 2011 is
a. P2,784,000
c. P3,784,000
b. P3,084,000
d. P3,584,000
Ralf Corporation had the following account balances at December 31, 2011:
Cash on hand and in bank
P2,500,000
Cash restricted for bonds payable due on June 30, 2012
1,000,000
Time Deposit
3,000,000
Savings deposit set aside for dividends payable on June
30,2012
500,000
2. The total amount to be reported as cash and cash equivalents as of December 31, 2011 is
a. P7,000,000
c. P6,500,000
b. P6,000,000
d. P5,500,000
3. On December 31, 2011, Alfonso Company had the following cash balances:
Cash in bank
P15,000,000
Petty cash fund
50,000
Time deposit
5,000,000
Savings deposit
2,000,000
Cash in bank includes P500,000 of compensating balance against short term borrowing arrangement at
December 31, 2011. The compensating balance is legally restricted as to withdrawal by Alfonso. A check
of P300,000 dated January 15, 2012 in payment of accounts payable was recorded and mailed on
December 31, 2011. In the current assets section of the December 31, 2011 statement of financial
position, what amount should be reported as “cash and cash equivalents”?
a. P21,850,000
b. P16,850,000
4. On January 1, 2011, Tinoc Company borrows P2,000,000 from National Bank at 12% annual interest. In
addition, Tinoc is required to keep a compensatory balance of P200,000 on deposit at National Bank
which earn interest at 4%. The effective interest that Tinoc pays on its P2,000,000 loan is?
a. 10.0%
c. 12.0%
b. 11.6%
d. 12.9%
Cash in bank balance of William Co. on January 1, 2011 was P70,000 representing 35% paid-up Capital of
its authorized share capital of P200,000. During the year you ascertained the following postings to some
accounts, as follows:
5. Cash in bank balance at December 31, 2011 was
a. P41,500
c. P34,500
b. P33,000
d. P39,500
Debit
Credit
Petty cash fund
P 2,000
Accounts receivable trade
450,000
P290,000
Subscription receivable
60,000
50,000
Delivery equipment
50,000
Accounts payable trade
280,000
430,000
Bank loan
35,000
80,000
Accrued expenses
1,500
Subscribed share capital
60,000
Unissued share capital
130,000
Authorized share capital
200,000
Sales
450,000
Purchases
430,000
Expenses (including
depreciation of
P5,000 and accrued
expenses of P1,500)
90,000
a. P50,000
c. P76,000
b. P66,000
d. P134,000
Cash
P 47,000
Inventory
101,000
P 93,000
Accounts receivable
82,000
116,000
Accounts payable
68,000
63,000
Sales
1,150,000
Cost of goods sold
900,000
Operating expenses
200,000