On December 31, 2019, ABC Co. reported the following account balances:

Cash on Hand P125,000

Cash in Bank-BPI 700,000

Cash in Bank-RCBC (Overdraft) (150,000)

Cash in Bank-BDO 1,000,000

Cash in Bank-PNB 1,200,000

Cash in Bank-Rural Bank of Florida 780,000

Investment in Commercial Papers 500,000

Investment in SMC Ordinary Shares 300,000

Petty Cash Fund 10,000

Additional information:

1. Cash on hand is composed of the following:

Currencies and coins P 25,000

Postal money orders 30,000

Customer’s check dated December 31, 2019 20,000

Customer’s check dated January 5, 2020 50,000

Total P 125,000

2. The cash in bank-BPI is a checking account which includes a P100,000 compensating balance in relation to a short-term loan. ABC Co. is legally required to maintain a minimum deposit balance of P100,000. In addition, P200,000 creditors’ checks prepared and recorded on December 30, 2019 are still in the company’s vault as of December 31, 2019.

3. The cash in bank-RCBC is a checking account where withdrawals have exceeded the deposits.

4. The cash in bank-BDO is a savings account which has been set aside for the payment of a bank loan which is due on May 31, 2020.

5. The cash in bank-PNB is a time despite account which was placed with the bank on April 1, 2019 and will mature on March 31, 2020.

6. Rural Bank of Florida has been closed and placed under receivership by the BSP on Oct. 2019. As of December 31, 2019, ABC CO. has been informed that it can collect only P500,000 of its P780,000 deposit. The collection can be made sometime in July 2020.

7. Investment in commercial papers represents one-year debt securities that were issued by a multi-national corporation on February 1, 2019 and will mature on January 31, 2020. ABC Co. purchased these commercial papers on November 15, 2019.

8. SMC ordinary shares are actively traded in the stock exchange. Their market value on December 31, 2019 was P327,000. There is no intention on the part of ABC Co. to sell them in the near future. These securities are for the purpose of earning dividends.

9. The petty cash fund has not been replenished. A cash count conducted on January 4, 2020 revealed the following composition:

Currencies and coins P 3,300

Unreplenished vouchers:

2019

Dec 20 Transportation 400

       25 Gasoline-service vehicle 700

       26 Office supplies 500

      27 Repair-equipment 500

      31 Transportation 300 2020

Jan 02 Gasoline-service vehicle 600

       04 Change oil-service vehicle 1,500

Employee check dated Jan. 10, 2020, 2,000

A sheet of paper with names of employees who made contributions for a birthday gift amounting to 2,500

Use the following accounts in making your adjusting entry: Transportation Expense; Gas & Oil Expense; Office Supplies Expense; Repair and Maintenance; Advances to Employees; Receivable from Petty Cashier.

Answer rating: 100% (QA)

date particulars debit credit 20122019 transportation expense ac dr 400 To receivable from petty cas... View the full answer