Jungkook Company reported total cash and cash equivalents of P3,650,000 on December 31, 2020. The following items are included in its cash and cash equivalents. Investment securities of P200,000, these investments are actively traded in the market. Jungkook Company has agreed to maintain a cash balance of P100,000 in one of its banks (this amount is not legally restricted as to withdrawal). Investment securities of P500,000. These securities are commercial paper. The term of the papers is six months, and they were purchased on November 1 at which time they had three months to go until they mature.How much is the correct amount of cash and cash equivalents that Jungkook Company should report in its December 31, 2020 statement of financial position?

Correct amount of cash and cash equivalents = total cash and cash equivalents reported by company -…

Answered: Jungkook Company reported total cash…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter12: The Statement Of Cash Flows

Section: Chapter Questions

Problem 12.7DC

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Jungkook Company reported total cash and cash equivalents of P3,650,000 on December 31, 2020. The following items are included in its cash and cash equivalents.

Investment securities of P200,000, these investments are actively traded in the market.
Jungkook Company has agreed to maintain a cash balance of P100,000 in one of its banks (this amount is not legally restricted as to withdrawal).
Investment securities of P500,000. These securities are commercial paper. The term of the papers is six months, and they were purchased on November 1 at which time they had three months to go until they mature.

How much is the correct amount of cash and cash equivalents that Jungkook Company should report in its December 31, 2020 statement of financial position?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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