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What total amount should be reported as cash on December

Assignment Help Financial Accounting
Reference no: EM132792408

Problem 1 - Cash and Cash Equivalents: Inclusion and Exclusion

Hola Company had the following balances on December 31, 2019:

Cash in bank- checking account- BDO P 400,000

Cash in bank- checking account- RCBC (20,000)

Cash in bank- savings account-BPI 50,000

Cash in money market account 500,000

Treasury bill, purchased November 1, 2019 1,500,000 maturing January 31, 2020

Time deposit purchased December 1, 2019 2,500,000 maturing March 31, 2020

Required - Compute for the Cash and Cash equivalents on December 31, 2019?

Problem 2 - Cash and Cash Equivalents: With Compensation Balance

Red Company had the following balances on December 31, 2019:

Cash in bank - current account P 5,000,000

Cash in bank - payroll account 800,000

Cash on hand 650,000

Cash in bank - restricted account for building construction 3,000,000 expected to be disbursed in 2019

Time deposit, purchased December 15, 2019 and 2,000,000 due March 15, 2020

Bank confirmation shows Cash in bank - current account as of December 31, 2019 is P5,000,000 with additional information that the P1,000,000 is a compensating balance against short-term borrowing arrangement. The compensating balance is not legally restricted as to withdrawal.

The cash on hand included a P200,000 check payable to Blue Company, dated January 5, 2020

Required -

1. What total amount should be reported as cash and cash equivalents on December 31, 2019?

2. Assume the same information except that the P1,000,000 compensating balance is legally restricted as to withdrawal, what total amount should be reported as cash on December 31, 2019?

Reference no: EM132792408

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