Exercises: Problem 1: The following data were presented by Hernandez Company on December 31, 2020: Cash in bank 2,500,000 Time deposit - 30 days 1,200,000 Money market placement due on June 30, 2021 1,000,000 Savings deposited in close banks 200,000 Sinking fund for bond payable due June 30, 2022 1,200,000 Petty cash fund 15,000 a. The reporting period is the calendar year. The cash receipts journal was held open until January 15, 2020 during which time an amount of P550,000 was collected and recorded on December 31, 2020. b. The cash in bank includes check paid by the customer of P250,000 outstanding for 18 months. c. Check of P75,000 dated January 31, 2021 in payment of accounts payable was recorded and mailed December 31, 2020. d. Check of P150,000 in payment of accounts payable was dated and recorded on Dec. 31, 2020 but mailed to creditors on January 15, 2021. Required: 1. Prepare adjusting entries on December 31, 2020. 2. Compute the total amount of cash and cash equivalents that should be reported on December 31, 2020. 3. Explain the presentation of the items excluded from cash and cash equivalents.