The controller for Clint Whispering Co. is attempting to determine the amount of cash to be reported on its December 31, 2020, balance sheet. The following information is provided. 1. Commercial savings account of $633,900 and a commercial checking account balance of $840,800 are held at First National Bank of Yojimbo. 2. Money market fund account held at Volonte Co. (a mutual fund organization) permits Whispering to write checks on this balance, $5,068,600. 3. Travel advances of $184,300 for executive travel for the first quarter of next year (employee to reimburse through salary reduction). 4. A separate cash fund in the amount of $1,504,300 is restricted for the retirement of long-term debt. 5. Petty cash fund of $1,320. 6. An I.O.U. from Marianne Koch, a company customer, in the amount of $158,700. 7. A bank overdraft of $117,400 has occurred at one of the banks the company uses to deposit its cash receipts. At the present time, the company has no deposits at this bank. 8. The company has two certificates of deposit, each totaling $634,300. These CDs have a maturity of 120 days. 9. Whispering has received a check that is dated January 12, 2021, in the amount of $121,210. 10. Whispering has agreed to maintain a cash balance of $528,600 at all times at First National Bank of Yojimbo to ensure future credit availability. 11. Whispering has purchased $1,976,800 of commercial paper of Sergio Leone Co. which is due in 60 days. 12. Currency and coin on hand amounted to $7,759. (a) Compute the amount of cash and cash equivalents to be reported on Whispering Co.’s balance sheet at December 31, 2020.

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter5: Cash Control Systems

Section: Chapter Questions

Problem 2AP

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The controller for Clint Whispering Co. is attempting to determine the amount of cash to be reported on its December 31, 2020, balance sheet. The following information is provided.

1.		Commercial savings account of $633,900 and a commercial checking account balance of $840,800 are held at First National Bank of Yojimbo.
2.		Money market fund account held at Volonte Co. (a mutual fund organization) permits Whispering to write checks on this balance, $5,068,600.
3.		Travel advances of $184,300 for executive travel for the first quarter of next year (employee to reimburse through salary reduction).
4.		A separate cash fund in the amount of $1,504,300 is restricted for the retirement of long-term debt.
5.		Petty cash fund of $1,320.
6.		An I.O.U. from Marianne Koch, a company customer, in the amount of $158,700.
7.		A bank overdraft of $117,400 has occurred at one of the banks the company uses to deposit its cash receipts. At the present time, the company has no deposits at this bank.
8.		The company has two certificates of deposit, each totaling $634,300. These CDs have a maturity of 120 days.
9.		Whispering has received a check that is dated January 12, 2021, in the amount of $121,210.
10.		Whispering has agreed to maintain a cash balance of $528,600 at all times at First National Bank of Yojimbo to ensure future credit availability.
11.		Whispering has purchased $1,976,800 of commercial paper of Sergio Leone Co. which is due in 60 days.
12.		Currency and coin on hand amounted to $7,759.

(a) Compute the amount of cash and cash equivalents to be reported on Whispering Co.’s balance sheet at December 31, 2020.

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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