Exercise # 1 Presented below are a number of independent situations Instructions

ID: 2567711 • Letter: E

Question

Exercise # 1 Presented below are a number of independent situations Instructions For each individual situation, determine the amount that should be reported as cash. If the item(s) is not reported as cash, explain the rationale. (10 pts.) Checking account balance $925,000; certificate of deposit $1,400,000; cash advance to subsidiary of $980,000; utility deposit paid to gas company $180. 1. 2. Checking account balance $500,000; an overdraft in special checking account at 3. Checking account balance $590,000; postdated check from a customer $11,000; 4. Checking account balance at bank $42,000; money market balance at mutual 5. Checking account balance $700,000; cash restricted for future plant expansion same bank as normal checking account of $17,000; cash held in a bond sinking fund $200,000; petty cash fund $300; coins and currency on hand $1,350 cash restricted due to maintaining compensating balance requirement of dcheck from customer $9,800; p s on hand $620. fund (has checking privileges) $48,000; NSF check received from customer $800. $500,000; short-term Treasury bills $180,000; cash advance received from customer $900 (not included in checking account balance); cash advance of $7,000 to company executive, payable on demand; refundable deposit of $26,000 paid to federal government to guarantee performance on construction contract

Explanation / Answer

Answer:

Checking account balance $925,000

Reported as cash

certificate of deposit $1,400,000

Reported as temporary investment

cash advance to subsidiary of $980,000

Reported as Account receivable

utility deposit paid to gas company $180.

Reported as Account receivable from the
Gas company

Checking account balance $600,000

Cash balance is =584,650
(600000-17000)+300+1350
Bond should be reported as Noncurrent assets

normal checking account of $17,000; cash held in a
bond sinking fund $200,000; petty cash fund
$300; coins and currency on hand $1,350.

Checking account balance $590,000; postdated check from customer $11,000; cash restricted due to
maintaining compensating balance requirement of $100,000; certified check from customer $9,800;
postage stamps on hand $620.

Cash balance is 599800
(590,000+9800)
Checking account balance 590000,
Certified check from customer 9800,
postdated check cannot be realized until deposited
Postage stamp are prepaid expanses

Checking account balance at bank $37,000; money market balance at mutual fund (has checking
privileges) $48,000; NSF check received from customer $800.

Cash balance is 85000
(37,000+48000)
NSF check should be reported as receivable

Checking account balance $700,000; cash restricted for future plant expansion $500,000; short-term
Treasury bills $180,000; cash advance received from customer $900 (not included in checking account
balance); cash advance of $7,000 to company executive, payable on demand; refundable deposit
of $26,000 paid to federal government to guarantee performance on construction contract.

Cash balance is 70900
(70,000+900)

cash restricted for future plant expansion
should be reported as a non current assets

short-term
Treasury bills $180,000 should be reported as temporary investment

cash advance of $7,000 to company executive should be reported as receivable

refundable deposit
of $26,000 paid to federal government should be reported as receivable.