What amount of cash and cash equivalents should the entity report on December 31, 2020? What amount of impairment loss on the machine should Aye Company recognize in 2021? What amount of gain loss on reclassification to PPE should Aye Company recognize in 2022? Situation 1 The entity reported the following items on December 31, 2020:Bank A - demand depositUndeposited customer checksCurrency and coins on handSavings Deposit – for plant expansionBank B - demand deposit270,000104,00011,6008,000,000400,000Treasury bills – 7 months maturityTreasury bills – 2 months maturityMarketable equity securities600,000300,000500,000The demand deposit in Bank B represents 20% compensating balance for a P2,000,000 loan with the bank.The entity may not withdraw the balance until the loan is repaid in 2024.Situation 2 On January 1, 2020, Aye Company acquired machinery worth P8,000,000 with a 10-year usefullife and no residual value. The entity elected to use the cost model. On December 31, 2021, the entity decidedto sell the asset and classified it as held for sale. The fair value less cost of disposal on such date P5,100,000.On December 31, 2022, the entity decided to classify the asset back into property, plant and equipment sincethere were no buyers for the asset. On this date, the fair value less cost of disposal is P4,700,000 and the valuein use is P5,500,000.

Cash and Cash Equivalents Cash and Cash Equivalents are important segment in the current assets of…

What amount of cash and cash equivalents should the entity report on December 31, 2020? What amount of impairment loss on the machine should Aye Company recognize in 2021? What amount of gain loss on reclassification to PPE should Aye Company recognize in 2022?

What amount of cash and cash equivalents should the entity report on December 31, 2020? What amount of impairment loss on the machine should Aye Company recognize in 2021? What amount of gain loss on reclassification to PPE should Aye Company recognize in 2022?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 15P: Comprehensive Receivables Problem Blackmon Corporations December 31, 2018, balance sheet disclosed...

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Problem 1 On September 1, 2020, Rayhak Company assigned specific receivables totaling to P750,000 to Pak Bank as a collateral on a P625,000, 12% loan. Rayhak will continue to collect the assigned accounts receivable. The bank also assessed a 2% service charge on the total accounts receivable assigned. Rayhak is to make monthly payments to the bank with the cash collected on the assigned accounts receivable. Collections of assigned account during September 2020totaled P260,000 gross of cash discounts amounting to P3,500. Prepare all the e journal entries relating to the problem for the month of September 2020. (Books of Rayhak)
1. San Company reported the following items on December 31, 2022:Treasury bills – 7 months maturity P 150,000Treasury bills – 2 months maturity 75,000Bank A – demand deposit 67,500Undeposited customer check 26,000Currency and coins on hand 2,900Savings deposit – for plant expansion 2,000,000Bank B – demand deposit 100,000The demand deposit in Bank B represents a 20% compensating balance for a P1,000,000 loan with thebank. Victoria may not withdraw the balance until the loan is repaid in 2025. What amount of cash andcash equivalents should Victoria report on December 31, 2022?A. 171,400 C. 421,400B. 321,400 D. 271,400
An entity provided the following data on December 31, 2020: Checkbook balance P5,000,000 Bank statement balance 4,000,000 Check drawn on entity’s account, payable to supplier, dated and recorded on December 31, 2020 but not mailed until January 31, 2021 1,000,000 Cash in sinking fund 1,500,000 Treasury bills, purchased November 1, 2020 and maturing January 31, 2021 2,500,000 Time deposit, purchased October 1, 2020 and maturing January 31, 2021 2,000,000 What amount should be reported as cash and cash equivalents on December 31, 2020?
SM Investments Corporation had the following account balances at December 31, 2019:Cash on hand and in bank P2,500,000Cash restricted for bonds payable dueOn June 30, 2020 1,000,000Time Deposit 3,000,000Savings deposit set aside for dividendsPayable on March 31, 2020 500,000* The cash in bank included a customer’s check of P50,000 outstanding for 16 months.* Check of P80,000 in payment of accounts payable was dated and recorded on December31, 2019 but mailed to creditors on January 12, 2020.* Check of P20,000 dated January 31, 2020 in payment of accounts payable was recordedand mailed December 31, 2019.*The reporting period is the calendar year. The cash receipts journal was held open untilJanuary 15, 2020 during which time P 100,000 was collected and recorded on December31, 2019.In the current assets section of SM’s December 31, 2019 balance sheet, the amount reportedas cash and cash equivalents is __________
SM Investments Corporation had the following account balances at December 31, 2019:Cash on hand and in bank P2,500,000Cash restricted for bonds payable dueOn June 30, 2020 1,000,000Time Deposit 3,000,000Savings deposit set aside for dividendsPayable on March 31, 2020 500,000* The cash in bank included a customer’s check of P50,000 outstanding for 16 months.* Check of P80,000 in payment of accounts payable was dated and recorded on December31, 2019 but mailed to creditors on January 12, 2020.* Check of P20,000 dated January 31, 2020 in payment of accounts payable was recordedand mailed December 31, 2019.*The reporting period is the calendar year. The cash receipts journal was held open untilJanuary 15, 2020 during which time P 100,000 was collected and recorded on December31, 2019.In the current assets section of SM’s December 31, 2019 balance sheet, the amount reportedas cash and cash equivalents is __________Problem 6The December 31,2019 trial balance of Aboitiz Equity Ventures, Inc.,…
Assuming an economy have only two commercial banks in it banking system, Classic Bank and Prudent Bank. The following shows the balance sheet of the two banks as at 2019.Classic BankBalance sheet as at December, 2019GHSm GHSmAssets: Liabilities & Equity:Reserves 1,000 Deposits 3,000Securities 2,000 Equity 7,000Loans & Advances 1,000Property, Plant and Equipment 6,000 .10,000 10,000Prudent BankBalance sheet as at December, 2019GHSm GHSmAssets: Liabilities & Equity:Reserves 600 Deposits 2,500Securities 1,500 Equity 4,400Loans & Advances 800Property, Plant and Equipment 4,000 .6,900 6,900Assume a required reserve ratio of 10%.(a) What is the amount of excess reserves in this commercial banking system?…………………………….………………………………………………………………………………………………………………………………………………….……………………………………..……………………………………………………………………………….…………………………………………………………………………………………………………………………………………………(b)What is the maximum amount that the money supply can be expanded?What would be the effect of a fall in…
The following information was included in the bank reconciliation for EEECompany for October and November 2020: Checks and charges recorded by bank in November, including a November service charge of P10,000 and NSF check of P50,000 1,375,000 Service charge made by in October and recorded by depositor in November 5,000 Total credits to cash in all journals during November 1,550,000Customer’s NSF check returned in October and redeposited in November (no entry made by depositor in either October or November) 100,000 Outstanding checks on October 31,2020 that cleared in November 575,000 What is the total amount of outstanding checks on November 30,2020? FFF Company had the following bank reconciliation on June 30, 2020:
Culver Company shows a balance of $237,880 in the Accounts Receivable account on December 31, 2020. The balance consists of the following. Installment accounts due in 2021 $23,900 Installment accounts due after 2021 38,300 Overpayments to vendors 3,540 Due from regular customers, of which $39,570 represents accounts pledged as security for a bank loan 87,500 Advances to employees 1,740 Advance to subsidiary company (due in 2021) 82,900 Illustrate how the information above should be shown on the balance sheet of Culver Company on December 31, 2020. Assume that installment accounts collectible due after December 31, 2018 (Customers) are collectible within the operating cycle of the business. The company’s operating cycle is such that all installment receivables are classified as current. CULVER COMPANYBalance Sheet (Partial)
An entity provided the following data on December 31, 2020: Checkbook balance ₱ 5,000,000.00 Check drawn on entity’s account, payable to supplier, dated and recorded on December 31, 2020 but not mailed until January 31, 2021 1,500,000.00 Cash in sinking fund 1,500,000.00 Treasury bills, purchased November 1, 2020 and maturing January 31, 2021 2,500,000.00 Time deposit, purchased October 1, 2020 and maturing January 31, 2021 3,500,000.00 What amount should be reported as cash and cash equivalents on December 31, 2020?
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The following information was taken from the books of Underwood Traders for December 2019and January 2020:Items appearing on the bank reconciliation statement of Underwood Traders as at 31 December 2019Bank Reconciliation Statement of Underwood Traders as at 31st December 2019Details Amount (R) Balance per bank statement (favourable) 405 670Outstanding cheques: No CQ221 6 780No CQ276 12 450No CQ298 21 560No CQ305 13 240 Outstanding deposit: DS205 18 700Correction of bank error on Deposit DS200‐ amount overstated by Bank 2 500Balance per Bank account( favourable) 367 840Cheque counterfoils of Underwood Traders‐ January 2020Date Cheque Counterfoil no. Amount (R)3 CQ306 6 54012 CQ307 2 41016 CQ308 12 50017 CQ309 23 56020 CQ310 1 47021 CQ311 3 26022 CQ312 15 32023 CQ313 27 65026 CQ314 8 95029 CQ315 2 250103 91020 2020Deposit slips of Underwood Traders‐ January 2020Date Deposit Slip no. Amount (R)5 DS206 8 90012 DS207 32 40018 DS208 17 43020 DS209 9 65021 DS210 27 89022 DS211 36 540132…
7. Accompanying the bank statement was a credit memorandum for a short-term, noninterest-bearing note collected by the bank. What entry is required in the depositor’s accounts?a. Debit Cash; credit Miscellaneous Incomeb. Debit Cash; credit Notes Receivablec. Debit Accounts Receivable; credit Cashd. Debit Notes Receivable; credit Cash 8. On January 1, 2020, Point Luna Corporation sold inventory costing P1,800,000 with a list price of P2,200,000 and a cash price of P2,000,000 in exchange for a P2,400,000 noninterest-bearing note due on December 31, 2022. How much is the initial measurement of the receivable?a. 1,800,000b. 2,200,000 c. 2,000,000 d. 2,400,000 9. On January 1, 2020, ABC Co. sold a transportation equipment with a historical cost of P1,000,000 and accumulated depreciation of P300,000 in exchange for cash of P100,000 and a noninterest-bearing note receivable of P800,000 due on January 1, 2023. The prevailing rate of interest for this type of note is 12%. How much is the…