A new accountant at Metlock, Inc. is trying to identify which of the amounts sho

Question

A new accountant at Metlock, Inc. is trying to identify which of the amounts shown below should be reported as the current asset “Cash and cash equivalents” in the year-end balance sheet, as of April 30, 2017.

(a) What balance should Metlock report as its “Cash and cash equivalents” balance at April 30, 2017?

1. $56 of currency and coin in a locked box used for incidental cash transactions. 2. A $10,400 U.S. Treasury bill, due May 31, 2017. 3. $265 of April-dated checks that Metlock has received from customers but not yet deposited. 4. An $82 check received from a customer in payment of its April account, but postdated to May 1. 5. $4,850 in the company’s checking account. 6. $5,590 in its savings account. 7. $56 of prepaid postage in its postage meter. 8. A $26 IOU from the company receptionist.

Explanation / Answer

(a) Cash and Cash Equivalents:

Currency $56 U.S. Treasury bill $10,400 April checks $265 Checking account $4,850 Savings account $5,590 Total $21,161

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