Exercise 7-10 Exercise 7-10 A new accountant at Cullumber Ltée is trying to iden

Question

Exercise 7-10

Exercise 7-10

A new accountant at Cullumber 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: 1. Currency and coin totalling $127 in a locked box used for incidental cash transactions 2. A balance of $4,200 in the Royal Bank chequing account 3. A balance of $4,700 in the Royal Bank savings account 4. A $23,000 government treasury bill, due the next month, May 31 5. April-dated cheques worth $740 that Cullumber 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 $1,760 of currency and coin and $1,360 of cheques from customers, which were processed by the bank on May 1. 8. A $60 IOU from the company receptionist 9. Cash register floats of $480

Explanation / Answer

1 Currency and coin totalling $127 in a locked box used for incidental cash transactions Cash 2 A balance of $4,200 in the Royal Bank chequing account Cash 3 A balance of $4,700 in the Royal Bank savings account Cash 4 A $23,000 government treasury bill, due the next month, May 31 Cash equivalent 5 April-dated cheques worth $740 that Cullumber has received from customers but not yet deposited Cash 6 A $170 cheque received from a customer in payment of its April account, but postdated to May 1 Not cash or equivalent 7 Over-the-counter receipts for April 30 consisting of $1,760 of currency and coin and $1,360 of cheques from customers, which were processed by the bank on May 1. Cash 8 A $60 IOU from the company receptionist Not cash or equivalent 9 Cash register floats of $480 Not cash or equivalent (a) Amount to be reported as cash balance at April 30:($127+$4200+$4700+$740+$1760+$1360) $                            12,887 Cash Balance= $                            12,887 (b) Cash Equivalent=A $23,000 government treasury bill, due the next month, May 31 $23,000 A $60 IOU from the company receptionist Not applicable .(c) Cash and Cash equivalent(12887+2300) $                            15,187 (d) Post dated check is not yet entered in books . It will be entered as receipt on May1 IOU $60 will be entored as receivable from debtor

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