A new accountant at Wildhorse Ltée is trying to identify which of the following

Question

A new accountant at Wildhorse Ltée is trying to identify which of the following amounts should be reported as cash and cash equivalents in the April 30 year-end statement of financial position:

Question1: What amount should Wildhorse report as its cash balance at April 30? Cash Balance $_______

What should it consider to be a cash equivalent? For the amounts not included in cash equivalents put as "Not Applicable".
Item No.
1. Not Applicable
2. Not Applicable
3. Not Applicable
4. Cash Equivalence
5. Not Applicable
6. Not Applicable
7. Not Applicable
8. Not Applicable
9. Not Applicable

Question 2: What combined amount would Wildhorse report as cash and cash equivalents on its year-end statement of financial position? Cash and cash equivalents $_______

Question 3: In which financial statement(s) and in what account(s) should the items not included in part (a) be reported? For items which are included in (a) put as “Not Applicable”.

ANSWERS TO QUESTION 3

What is Item No. 8?

1. Currency and coin totalling $136 in a locked box used for incidental cash transactions 2. A balance of $4,000 in the Royal Bank chequing account 3. A balance of $4,600 in the Royal Bank savings account 4. A $26,000 government treasury bill, due the next month, May 31 5. April-dated cheques worth $730 that Wildhorse has received from customers but not yet deposited 6. A $170 cheque received from a customer in payment of its April account, but postdated to May 1 7. Over-the-counter receipts for April 30 consisting of $1,770 of currency and coin and $1,140 of cheques from customers, which were processed by the bank on May 1. 8. A $40 IOU from the company receptionist 9. Cash register floats of $470

Explanation / Answer

Answer-

Items that should be included as Cash Equivalents-

1. Currency and coin totalling $136 in a locked box used for incidental cash transactions.

2. A balance of $4,000 in the Royal Bank chequing account.

3. A balance of $4,600 in the Royal Bank savings account.

4. A $26,000 government treasury bill, due the next month, May 31

5. April-dated cheques worth $730 that Wildhorse has received from customers but not yet deposited.

6. A $170 cheque received from a customer in payment of its April account, but postdated to May 1 - Account Receivables and should come under Balance sheet.

Number 8: A $40 IOU from the company receptionist

This is "Account Receivable" and it should be shown in "Balance Sheet"

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