CASH MANAGEMENT

Illustration 1 - Accounting for PCF

Jake Company adopted the use of a petty cash fund system in December 2019. The following transactions
affected the account during the month:
• On December 1, the PCF was established for P10,000.
• The following expenses were paid using the PCF: entertainment and representation, P2,400; transportation,
P800; and office supplies, P1,600.
• On December 31, a check was issued to the order of the PCF custodian and the vouchers representing the
expenses were recorded in the books. After the replenishment, a cash count revealed that the PCF balance
is P10,000.

Journalize the above transactions under:

(a) the fluctuating fund system
(b) the imprest system

Illustration 2 - Cash Short and Over Account

Zyrus Company maintains its PCF at P5,000 using the imprest system. Assume the following independent
cases:
Case A: On January 31, the PCF was not replenished and a cash count revealed the following: vouchers for
various expenses, P3,200; bills, P1,200; coins P350.
Case B: On January 31, the PCF was not replenished and a cash count revealed the following: vouchers for
various expenses, P1,600; employee advances, P2,100; bills, P1,200; coins P350.

In each of the above cases, determine the following:

(a) the amount of and accounting treatment for any shortage or overage; and
(b) the correct PCF balance to be reported in January 31.

Illustration 3 - Petty Cash Impurities

Jhepoy Company maintains a PCF at an imprest balance of P30,000. Upon examination of the PCF lockbox,
the following items were found:
• Total bills and coins, P8,950
• Vouchers for various disbursements (not yet replenished), P12,000
• Check payable to the PCF custodian, representing her salary, P7,500
• Unused postage stamps, P650
• Envelope containing bereavement donations for the recent death of an employee's immediate family member
(contents intact), P1,200

Determine the following:

(a) the amount of and accounting treatment for any shortage or overage; and
(b) the correct PCF balance to be reported on January 31.

Illustration 4 - Single-Date Bank Reconciliation

Sekiro Company has the following recorded in its ledger pertaining to its cash deposited in Northsouth Bank:

V. L. Francisco
 CASH MANAGEMENT

The bank statement for the month of January contained the following information:

Other relevant information are as follows:

1. Sekiro Company reconciled its December 31 PY bank balance with two outstanding checks: No. 008 for
P10,000 and No. 010 for P20,000.
2. Check No. 981 was drawn by Seiko Company and was charged in error against Sekiro's account.
3. Check No. 016, correctly drawn for P52,000 was incorrectly booked as P25,000.
4. The bank credit on January 28 represents proceeds of a P50,000 note, net of P5,000 collection fee
charged by the bank.
5. The NSF check is a customer check.

Prepare a single-date adjusted cash balance method bank reconciliation.

Illustration 5 - Book to Bank and Bank to Book Formats

Kazzie Company provided the following data in August 2019:

• Balance per bank statement, P3,800,000

• Deposit in Transit, P520,000
• Amount erroneously credited by bank, P40,000
• Bank service charge for the month, P5,000
• NSF Check, P50,000
• Outstanding checks, P675,000

Prepare reconciliations using the three bank reconciliation formats.

V. L. Francisco