Exercise 7-1 Your answer is incorrect. Try again. The controller for Clint Eastw

Question

Exercise 7-1 Your answer is incorrect. Try again. The controller for Clint Eastwood Co. is attempting to determine the amount of cash to be reported on its December 31, 2017, balance sheet. The following information is provided. 1 Commercial savings account of $600,000 and a commercial checking account balance of $900,000 are held at First National Bank of Yojimbo 2. Money market fund account held at Volonte Co. (a mutual fund organization) permits Eastwood to write checks on this balance, $5,000,000 3 Travel advances of $180,000 for executive travel for the first quarter of next year (employee to reimburse through salary reduction). 4. A separate cash fund in the amount of $1,500,000 is restricted for the retirement of long-term debt. 5. Petty cash fund of $1,000. 6. An I.o.u. from Marianne Koch, a company customer, in the amount of $190,000 7. A bank overdraft of $110,000 has occurred at one of the banks the company uses to deposit its cash receipts. At the present time, the company has no deposits at this bank 8. The company has two certificates of deposit, each totaling $500,000. These CDs have a maturity of 120 days. 9. Eastwood has received a check that is dated January 12, 2018, in the amount of $125,000. 10. Eastwood has agreed to maintain a cash balance of $500,000 at all times at First National Bank of Yojimbo to ensure future credit availability. 11. Eastwood has purchased $2,100,000 of commercial paper of Sergio Leone Co. which is due in 60 days. 12. Currency and coin on hand amounted to $7,700 (a) Compute the amount of cash and cash equivalents to be reported on Eastwood Co.'s balance sheet at December 31, 2017. The amount of Cash and Cash Equivalents reported on December 31, 2017 9608700

Explanation / Answer

the amount of cash and cash equivalents reported on december 31 2017 = 8,608,700.

the following table shows the required calculation:

1.commercial savings account balance in first national bank $600,000 commercial checking account balance in first national bank 900,000 2.money market fund account 5,000,000 5.petty cash fund 1,000 11.commercial paper due in 60 days 2,100,000 12.currency and coin on hand 7,700 amount of cash and cash equivalents on december 31 2017 8,608,700

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