Problem 1

EVA Co. reported a total cash and cash equivalents amounting of P6,325,000 on December 31, 2020, which includes the following information:

• Two certificates of deposit, each totaling P500,000. These certificates of deposits have a maturity of 120 days.
• A check that is dated January 12, 2021 in the amount of P125,000.
• A commercial paper of P2,100,000 which is due in 90 days.
• Currency and coins on hand amounted to P7,700.

EVA Co. has agreed to maintain a cash balance of P500,000 in one of its bank at all times to ensure future credit availability (This amount is legally restricted as to withdrawal and was included in the above balance).

How much is the correct amount of cash and cash equivalents that EVA Co. should report in its December 31, 2020 statement of financial position?

Group of answer choices

P5,200,000

P5,235,000

P4,700,000

P4,825,000