The balance sheet at December 31,2019 of Universal Robina Corporation showed a cash balance of P183,500. An examination of the books disclosed the following: Cash sales of P24,000 from January 1 to 5, 2020 were pre dated as of December 28 to 31, 2019 and charged to the cash account. Customers’ checks totaling P9,000 deposited with and returned by the bank “NSF” on December 27, 2019 were not recorded in the books. Checks of P11,200 in payment of liabilities were prepared before December 31,2019 and recorded in the books, but withheld by the treasurer. Post-dated checks totaling P6,800 are being held by the cashier as part of cash. The company’s experiences shows that post-dated checks are eventually realized. The cash account includes P40,000 being reserved for the purchase of an IPAD which will be delivered soon. The cash balance that should be shown on December 31, 2019 balance sheet is ________. a.P 92,500 b. P 154,900 c. P 114,900 d. P163,900
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
The
balance of P183,500. An examination of the books disclosed the following:
Cash sales of P24,000 from January 1 to 5, 2020 were pre dated as of December 28 to 31, 2019
and charged to the cash account. Customers’ checks totaling P9,000 deposited with and
returned by the bank “NSF” on December 27, 2019 were not recorded in the books. Checks of
P11,200 in payment of liabilities were prepared before December 31,2019 and recorded in the
books, but withheld by the treasurer. Post-dated checks totaling P6,800 are being held by the
cashier as part of cash. The company’s experiences shows that post-dated checks are eventually
realized. The cash account includes P40,000 being reserved for the purchase of an IPAD which
will be delivered soon. The cash balance that should be shown on December 31, 2019 balance
sheet is ________.
a.P 92,500 b. P 154,900 c. P 114,900 d. P163,900
Juan Gabriel Company had the following account balance on December 31, 2019.
Petty cash fund 50,000
Cash in bank – current account 4,000,000
Cash in bank – payroll account 1,000,000
College of Accounting Education
3F, Business & Engineering Building
Matina, Davao City
Phone No.: (082)300-5456 Local 137
- 78 -
Cash on hand 500,000
Cash in bank – restricted account for plant additions, expected to be
disbursed in 2020 500,000
Cash in sinking fund set aside for bond payable due June 30, 2020 1,500,000
Commercial papers 2,000,000
The petty cash includes unreplenished December 2019 petty cash expense vouchers of P5,000
and employee IOUs of P5,000. The cash on hand includes a P100,000 check payable to Juan
Gabriel dated January 15, 2020. In exchange for guaranteed line of credit, Juan Gabriel has
agreed to maintain a minimum balance of P200,000 in its unrestricted current bank account.
What should be reported as cash and cash equivalents on December 31, 2019?
a. P 7,940,000 b. P 8,740,000 c. P 8,940,000 d. P
9,440,000
Mickey Company’s checkbook balance on December 31,2019 was P5,000,000. In
addition, Mickey held the following items in its safe on that date:
Check payable to Mickey, dated January 2,2020 in payment of
sale made in December 31,2019, not included in December 31
checkbook balance 2,000,000
Check payable to Mickey, deposited December 15 and included
in December 31 checkbook balance; the check marked “NSF” by the bank.
The check was redeposited on January 2,2020 and cleared on
Jan. 9, 2020 600,000
Check drawn on Mickey‘s account, payable to a vendor, dated and recorded
in Mickey’s books on December 31 but not mailed until January 10,2020 300,000
The proper amount to be shown as “cash” on the balance sheet at December 31,2019
is_________
a. 4,700,000 b. 5,200,000 c. 6,500,000 d. 6,800,000
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