1. MM Company began operations on January 1, 2015 and 5. The books of Harry Co. show the following balances on
appropriately uses the installment method of accounting. The December 31, 2016:
following data are available for 2015 and 2016
Accounts Receivable 313,750
Deferred Gross Profit (Before Adjustment) 38,000
2015 2016
1,500,000
Installment Sales 1,200,000 Analysis of the accounts receivable reveal the following:
500,000
Cash Collections from: 600,000
2015 Sales 400,000 40% Regular accounts 207,500
2016 Sales 2015 installments accounts 16,250
Gross profit on sales 30% 2016 installments accounts 90,000
The realized Gross Profit for 2016 is Sales on an installments basis in 2011 were made at 30%
above cost; in 2016 at 33 ⅓ above cost. Expenses paid was
a. 240,000 b. 390,000 c. 440,000 d.600,000 P1,500 relating to installment sales. How much is the net
income on installment sales?
2.TT Company, which began business on January 1, 2015, a. 11,000 b. 11,500 c. 16,000 d. 10, 250
appropriately uses the installment sales method of
accounting. The following data are available for 2015. 6. DJ Co. accounts for installment sales on the basis. On
January 1, 2016, ledger accounts included in the following
Installment accounts receivable, 12/31/15 200,000 balances:
Deferred Gross Profit, 12/31/15
( before recognition of realized gross profit) 140,000 Installment Receivable -2014 P38,500
Gross Profit on Sales 40%
Installment Receivable- 2015 155,000
Deferred Gross Profit - 2014 11,550
The cash collections and the realized gross profit on Deferred Gross Profit - 2015 62,000
installment sales for the year ended December 31, 2015 On December 31, 2016 account balances before
should be adjustments for realized gross profit on installment sales
Cash Collections Realized Gross profit were:
a. P100,000 P80,000 Installment Receivable -2014 P none
b. 100,000 60,000 Installment Receivable- 2015 42,000
c. 150,000 80,000 Installment Receivable- 2016 100,500
d. 150,000 60,000 Deferred Gross Profit - 2014 11,550
Deferred Gross Profit - 2015 75,810
3. Dudong electronics makes all of its sales on credit and Installment sales in 2016 were made at 42% above cost of
accounts for them using the installment sales method. For
simplicity, assume that all sales occur on the first day of the merchandise.
year and that all cash collections are made on the last day of
the year. Dudong electronics charges 18% interest on the The total realized gross profit on installment sales in 2016:
unpaid installment balance. Data for 2015 and 2016 are as
follows: a. 132,510 b. 98,910 c. 97,510 d. 102,834
7. Dipolog Company sells appliances on the installment
basis. Below are information for the past three years:
2016 2015 2014
2015 2016 Installment sales P750,000 P600,000 P400,000
Installment Sales 100,000 120,000
Cost of goods sold 60,000 Cost of Sales 450,000 375,000 260,000
Cash Collections (P and i) 80,000
Collections on:
2016 installment sales 275,000
2015 installment sales 180,000 240,000
2015 Sales 40,000 50,000 2014 installment sales 125,000 120,000 150,000
2016 Sales 90,000
Repossessions on defaulted accounts included one made on
a 2016 sale for which the unpaid balance amounted to
The interest income recognized in 2016 amounted to P5,000. The depreciated value of the appliance repossessed
was P2,500.
a. 14,040 b.21,600 c. 35,640 d. 49,700 The realized gross profit in 2016 on collections of 2016
4. Using the same information in No. 3 compute the realized installment sales was
gross profit in 2016:
a. 108,000 b. 110,000 c. 221,250 d. 221,500
a. 14,040 b. 21,600 c.35,640 d. 49,700
8. On January 1, 2015 Art company sold its idle plant facility Basic Problems
to Tony, inc for P1,050,000. On this date, the plant had a
depreciated cost of P735,00. Tony paid P150,000 cash on 1. Rhodalyn Company had the following balances on
January 1, 2015 and signed a P900,000 note bearing
interest at 10%. The note was payable in three annual December 31, 2017:
installments of P300,000 beginning January 1, 2016. Art
appropriately accounted for the sale under the installment Cash in checking account 350,000
method. Tony made a timely payment of the first installment
on January 1, 2016 of P390,000 which included interest of Cash in money market account 750,000
P90,000 to date of payment. At December 31, 2016, Art has
deferred gross profit of Treasury Bill, purchased Nov 1,2017
a. 153,000 b. 180,000 c.225,000 d. 270,000 maturing January 31, 2018 3,500,000
9. On October 1, 2015, Rodel corporation, a real estate Time deposit purchased December 1, 2017
developer, sold land to Gerry Company for P5,000,000.
Gerry paid cash P600,000 and signed a ten year P4,400,000 Maturing March 31, 2018 4,000,000
note bearing interest at 12%. The carrying amount of the
land was P4,000,000 on the date of sale. The note was What amount should be reported as cash and cash
payable in forty quarterly principal installments of P110,000 equivalents on December 31,2017?
beginning January 2, 2016. Rodel appropriately accounts for
the sale under the cost recovery method. On January 2, a. 1,100,000
2016, Gerry paid the first principal installment of P110,000 b. 3,850,000
and interest of P132,000. For the year ended December c. 4,600,000
31,2016, what total amount of income should Rodel d. 8,600,000
recognize from the land sale and the financing? 2. Kate company had the following balances on December
31, 2017
a. 0 b. 208,000 c. 508,200 d.309,640
Cash in bank- current account 5,000,000
10. Asser Computer Co. began operation at the beginning of Cash in bank- payroll account 1,000,000
2016. During the year, it had cash sales of P6,875,000 and Cash on hand
sales on installment basis of P16,500,000. Asser adds a Cash in bank- restricted account for building 500,000
markup on cost of 25% on cash sales and 50% on
installment sales. Installments receivable at the end of 2016 Construction expected to be 3,000,000
is P6,600,000. Total realized gross profit for 2016 is : disbursed in 2018
Time deposit, purchased December 15,2017 2,000,000
a. 1,375,000 b. 3,300,000 c.4,675,000 d. 3,575,000 and due March 15,2018
INSTALLMENT SALES The cash on hand included a P200,000 check payable to
May 11, 2018 Kate, dated January 15, 2018
10 questions
What total amount should be reported as cash and cash
equivalents on December 31, 2017?
a. 6,000,000
b. 8,300,000
c. 6,500,000
d. 8,700,000
3. Rhea Company provided the following data on december
31, 2017
Checkbook balance 4,000,000
Bank statement balance 5,000,000
Check drawn on Rhea’s account payable
to supplier, dated and recorded
on December 31,2017 but not
mailed until January 15,2018 500,000
Cash in sinking fund 2,000,000
On December 31,2017, what amount should be reported as
“cash” under current assets?
a. 4,500,000
b. 5,500,000
c. 3,500,000
d. 6,500,000
4. At year-end Jordan Company reported cash and cash On December 31, 2017 , what amount of total cash should
equivalents which comprised the following: be under current assets?
Cash on hand 500,000 a. 1,775,000
Demand deposit 4,000,000 b. 2,250,000
Certificate of deposit 2,000,000 c. 2,375,000
Postdated customer check d. 3,975,000
Petty cash fund 300,000
Traveler’s check 50,000 7. On December 31, 2017, Jeffrey Company had the
Manager’s check following cash balances:
Money order 200,000
100,000 Cash in Bank 1,800,000
150,000 Petty cash fund-all funds were
50,000
What total amount should be reported as “cash” at year-end? reimbursed on 12/31/2017 250,000
Time deposit due February 1, 2018
a. 7,000,000 Cash in bank included P600,000 of compensating balance
b. 4,800,000 against short-term borrowing arrangement on December 31,
c. 6,800,000 2017 The compensating balance is legally restricted as to
d. 5,000,000 withdrawal.
5. Reymark Company reported the following information at
year-end: On December 31, 2017, what total amount should be
● Share investment of P1,000,000 that are very reported as cash and cash equivalents?
actively traded in the stock market a. 1,850,000
● Government treasury treasury bills of P2,000,000 b. 1,250,000
c. 2,100,000
with a then-year term but purchased on December d. 1,500,000
31 at which time they had two months to go until
maturity 8. Lalaine Company reported cash account per ledger on
● Cash of P3,400,000 in the form of coin, currency,
saving account and checking account December 31, 2017 at P4,700,000 which consisted of the
● Commercial papers of P1,500,000 with term of
nine months but purchased on December 31 at following:
which time they had three months to go maturity
1. What total amount should be reported as cash? Petty cash fund 20,000
a. 3,400,000
b. 4,900,000 Undeposited receipts, including a
c. 4,400,000
d. 5,400,000 postdated customer check
for P100,000 1,500,000
Cash in bank per statement , with a
check for P200,000 still outstanding 2,500,000
2. What total amount should be reported as cash Deposit in bank closed by BSP 500,000
equivalents?
Vouchers paid out of collections,
a. 2,000,000
b. 1,500,000 not yet recorded 150,000
c. 3,500,000
d. 4,500,000 IOUs signed by employees, taken
from collections 30,000
________
4,700,000
6. Rey Company had the following account balances on What amount should be reported as cash on December 31,
december 31, 2017 2017?
Cash in bank 2,250,000 a. 3,720,000
Cash on hand 125,000 b. 3,900,000
Cash restricted for addition to plant c. 4,220,000
and expected to be d. 4,020,000
disbursed in 2018 1,600,000
Cash in bank included P600,000 of compensating balance
against short-term borrowing arrangement. The
compensating balance is not legally restricted as to
withdrawal.
9. Fairy Company reported the checkbook balance on 11. Jentzen Company reported an imprest petty cash fund of
December 31,02017 at P5,000,000 P50,000 with the following details:
And held the following items on same date:
Check payable to Fairy, dated 2,000,000 Currencies 20,000
January 2, 2018 in payment of Coins 2,000
sale made in December 2017, Petty cash vouchers:
not included in December checkbook balance 3,000
Gasoline payments for delivery equipment 1,000
Check payable to Fairy, deposited Medical supplies for employees 1,500
December 15 and included in December 31 Repairs of office equipment 3,500
checkbook balance, but returned by bank on Loans to employees
December 30 stamped “NSF”. The check was A check drawn by the entity payable 15,000
redeposited on January 2, 2018 and cleared to the order of Grace dela Cruz
on January 9, 2018 petty cash custodian, representing her salary
500,000 An employee’s check returned by the bank for
insufficiency of funds
3,000
Check drawn on Fairy’s account, payable 300,000 A sheet of paper with names of severa
to a vendor, dated and recorded in Fairy’s books employees together with contribution for a
on December 31, 2017 but not mailed until birthday gift of a co-employee. Attached to the
January 10, 2018 sheet of paper is a currency of
5,000
Certificate of deposit 1,000,000
What amount should be reported as cash on December 31, What amount of petty cash fund should be reported in the
2017? statement of financial position?
a. 4,800,000 a. 42,000
b. 5,300,000 b. 27,000
c. 6,500,000 c. 37,000
d. 5,800,000 d. 22,000
10. Clarissa Company reported petty cash fund which
comprised the following: COMPREHENSIVE PROBLEMS
Coins and currency 3,300 12. Laurence Company had the following account balances
Paid Vouchers: on December 31, 2017
Transportation 600 3,000 Petty cash fund 50,000
Gasoline 400 Cash in bank-current account 4,000,000
Office supplies 500 Cash in bank-payroll account 1,200,000
Postage stamps 300 Cash in bank-sinking fund 2,000,000
Due from employees 1,200 Cash on hand
_____ Cash in bank-restricted account for plant 500,000
Manager’s Check returned by bank addition and expected to be disbursed in 2018
marked as NSF 1,000 Treasury Bills 1,500,000
Check drawn by the entity to the 1,000,000
order of petty cash custodian
2,700 What total amount should be reported as cash and cash
equivalents on December 31, 2017?
What is the correct amount of petty cash fund for statement
presentation purposes? a. 8,640,000
b. 7,440,000
a. 10,000 c. 7,640,000
b. 7,000 d. 5,640,000
c. 6,000
d. 9,000
13. Drew company provided the following information on 15. On December 31, 2017, Kimmy Company reported cash
December 31, 2017 account balance per ledger of P3,600,000 which included
the following:
Petty cash fund 50,000 Cash in bank-demand deposit 1,500,000
Cash in bank- First bank 4,000,000
Cash in bank- Second bank (250,000) Time deposit-30 days 500,000
Money market placement-Third bank 1,000,000
Time deposit- Fourth bank 2,000,000 NSF check of customer 20,000
Money market placement due on June 30, 2018 1,000,000
Savings deposit 50,000
● The petty cash fund included unreplenished IOU from an employee 30,000
December 2017 petty cash expense vouchers for
P15,000 and an employee check for P5,000 dated Pension fund 400,000
January 31, 2018
Petty cash fund 10,000
● A check for P100,000 was drawn against First
Bank current account dated amd recorded Customer check dated January 31, 2018 60,000
December 29,2017 but delivered to payee on
January 15, 2018 Customer check outstanding for 18 months 30,000
● The Fourth bank time deposit is set aside for land ________
acquisition in early january 2018.
3,600,000
What total amount should be reported as cash and cash
equivalents on December 31, 2017? ● Check of P100,000 in payment of accounts
payable was dated and recorded on December
a. 5,130,000 31,2017 but mailed to creditors on January 15,
b. 5,150,000 2018.
c. 4,130,000
d. 4,880,000 ● Check of P50,000 dated January 31,2018 in
payment of accounts payable was recorded and
14. Nicole Company provided the following information on mailed December 31, 2017
December 31, 2017:
● The cash receipts journal was held open until
Cash on hand 500,000 january 15, 2018 during which time P200,000 was
Petty cash fund 20,000 collected and recorded on December 31, 2017
Security bank current account
PNB Current account no. 1 1,000,000 What total amount should be reported as cash and cash
PNB Current account no. 2( overdraft) 400,000 equivalents on december 31, 2017 ?
BSP treasury bill-60 days (50,00)
a. 2,010,000
3,000,000 b. 1,960,000
c. 1,860,000
d. 1,510,000
CASH AND CASH EQUIVALENTS
May 12, 2018
15 questions
● The cash on hand included a customer postdated
check of P100,000 and postal money order of
P40,000
● A check for P200,000 in payment of account was
drawn against Security Bank account, dated
January 15, 2018, delivered to the payee and
recorded December 31, 2017
What total amount of cash and cash equivalents should be
reported on December 31, 2017?
a. 4,970,000
b. 6,970,000
c. 4,770,000
d. 1,970,000