Reference no: EM132825366

You noted the following composition of MALABO Company's "cash account" as of December 31, 2020 you noted th following composition:

Demand deposit account P2,000,000
Time deposit - 30 days 1,000,000
NSF check of customer 40,000
Money market placement (due June 30, 2007) 1,500,000
Savings deposit in a closed bank 100,000
IOU from employee 20,000
Pension fund 3,000,000
Petty cash fund 10,000
Customer's check dated January 1, 2007 50,000
Customer's check outstanding for 18 months 40,000
Total P7,760,000 (double ruled)

Additional information follows:

a) Check of P200,000 in payment of accounts payable was recorded on December 31, 2020 but mailed to suppliers on January 5, 2021..

b) Check of P100,000 dated January 15, 2021 in payment of accounts payable was recorded and mailed on December 31, 2020.

c) MALABO uses the calendar year. The cash receipts journal was held open until January 15, 2021, during which time P400,000 was collected and recorded on December 31, 2020.

Requirements:

Problem 1. prepare an adjusting entries.

Problem 2. compute the cash and cash equivalents to be shown on 12/31/2020 statement of financial position.