Concept explainers
Reporting Cash, Cash Equivalents, and Restricted Cash
Expedia, Inc., reported total cash of $1,862 million at September 30, 2016. Of this amount, $18 million was set aside and could be used only to fulfill the requirement of an aviation authority of a certain foreign country to protect against the potential nondelivery of travel services in that country in the short term. Another $542 million was invested in
TIP: Some items are not current assets.
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Chapter 5 Solutions
FUND FINCL ACCT (LL) W/CONNECT >IB<
- Delta Automotive Corporation has the following assets listed in its 12/31/2024 trial balance: Cash in bank—checking account $ 29,500 U.S. Treasury bills (mature in 60 days)* 7,000 Cash on hand (currency and coins) 2,050 U.S. Treasury bills (mature in six months)* 17,000 Undeposited customer checks 2,540 *Purchased on 11/30/2024 Required: Determine the correct balance of cash and cash equivalents to be reported in the current asset section of the 2024 balance sheet. For each of the items not included in your answer to requirement 1, select the correct classification of the item.arrow_forwardhe Steamed Egg Company has the following items in its general ledger: Petty cash fund- P5,000; Checking account, Bank of Korea- P290,000; Cash fund legally restricted for short-term borrowings, Bank of Korea- P100,000; Checking account, BPI Bank- P(170,000); Checking account, Metrobank- P49,500. The amount of cash that should be reported in Steamed Egg’s balance sheet as a current asset is:Required to answer.arrow_forwardCaring Enterprises had the following account balances on December 31, 2020: Cash in BPI Bank - 2,250,000; Cash allowed for the acquisition of machinery - 1,600,000; Revolving Fund - 125,000. Cash in Bank included P600,000 of compensating balance against short-term borrowing arrangement. The compensating balance is not legally restricted as to withdrawal. That total amount should be reported as cash on December 31, 2020? *arrow_forward
- Mickey Mouse Corporation reported total cash and cash equivalent of P5,500,000 on December 31, 2021 include the following information:a. Two certificates of deposits, each totaling P500,000. One certificate having a maturity of 120 days and other certificate having a maturity of 90 days. b. A check that is dated January 3,2022 in the amount of P250,000.c. A check that is yet to deliver to the payee until December 31, 2021 amounting to P350,000.d. Currency and coins in hand amounted to P10,500.e. Check payable to Mickey Mouse Corporation amounting to P100,000 was deposited on December 13, but returned by the bank on December 25, stamped “DAIF”. No entry has yet been made to return the return of the check.Mickey Mouse Corporation has agreed to maintain a cash balance of P700,000 in one of its banks at all times to ensure future credit availability (this amount is not legally restricted as to withdrawal and was included in the above balance). How much is the correct amount of cash and…arrow_forwardA new accountant at Skyline Company is trying to identify which of the following amounts should be reported as the current asset Cash and Cash Equivalents in the year-end balance sheet, as at June 30, 2024: Currency and coins totalling $76 in a locked box used for petty cash transactions. A 60-day, $12,900 guaranteed investment certificate, due July 31, 2024. June-dated cheques worth $375 that Skyline has received from customers but not yet deposited. A $104 cheque received from a customer in payment of her June account, but postdated to July 1. A balance of $2,360 in the Royal Bank chequing account. A balance of $4,160 in the Royal Bank savings account. Prepaid postage of $52 in the postage meter. A $110 IOU from the company receptionist. Cash register floats of $330. Over-the-counter cash receipts for June 30 consisting of $540 of currency and coins, $90 of cheques from customers, $550 of debit card slips, and $740 of bank credit card slips. These amounts were processed by the bank…arrow_forwardThe cash account of the AA Corporation as of December 31, 2022 consists of the ff: On deposit in current account with BDO bank P900,000 Cash collection not yet deposited to the bank 350,000 A customer's check returned by the bank for insufficient fund 150,000 A check drawn by the Vice President of the Corporation dated January 15, 2023 70,000 A check drawn by a supplier dated December 28, 2022 for goods returned by the corporation 60,000 A check dated May 31, 2022 drawn by the Corporation against the BPI Bank in payment of customs duties. Since the importation did not materialize, the check was returned by the customs broker. This check was an outstanding check in the reconciliation of the BPI Bank account 410,000 Petty Cash fund of which P10,000 is in currency; P7,200 in form of employees’ I.O.U. s; and P2,800 is supported by approved petty cash vouchers for expenses all dated prior to closing of the books on December 31, 2022 20,000…arrow_forward
- The statement of financial position of the Money Company on December 31, 2020 shows cash of P330,820. Thefollowing items were found to comprise this total amount: Checking account in Metrobank, (outstanding check As of year-end totaled P15,200) P105,200 Savings account at Far East Bank 30,800 Petty cash fund (including expense receipts for 250) 1,500 Cash on Hand (undeposited sales receipts) 4,200 Sinking fund cash 35,000 Cash in foreign bank (in equivalent pesos) 65,000 Customers' check on hand: Traveler's check 14,000 Manager's check 23,120 Short-term treasury bills 52,000 Money Company also has on hand a check payable to supplier amounting to P62,000, which has been recorded in the cash disbursement journal in December. REQUIRED: What is the correct amount of cash?arrow_forwardThe following transactions by Africa Traders occurred during February 2021: The provisional total of the bank column in the Cash receipts journal was R9 500. The provisional total the bank column in the Cash payments journal was R7 750. The bank balance in the general ledger amounted to R6 500 (favourable) on 1 February 2021. A capital contribution of R1 000 was deposited directly into the bank account of Africa Traders. Made an electronic funds transfer to the amount of R1 427 to settle the monthly telephone bill. Bank charges for the month were R180. SA Dealers deposited R550 directly into Africa Traders bank account. Debit order in favour of SA Computers of R350 for monthly computer services. Interest of R250 received on bank favourable. What will the new total of the bank column in the Cash Payments Journal of Africa Traders at 28 February 2021 be? NB: Instructions 1. Do not type the amount with any spaces as separators for thousands (eg: 12141.72) 2. Use a full stop to…arrow_forwardThe cash account of the Siopao Corporation as of December 31, 2022 consists of the following: On deposit in current account with BDO Bank P 900,000 Cash collection not yet deposited to the bank 350,000 A customer’s check returned by the bank for insufficient fund 150,000 A check drawn by the Vice-President of the Corporation dated January 15, 2023 70,000 A check drawn by a supplier dated December 28, 2022 for goods returned by the Corporation 60,000 A check dated May 31, 2022 drawn by the Corporation against the BPI Bank in payment of customs duties. Since the importation did not materialize, the check was returned by the customs broker. This check was an outstanding check in the reconciliation of the BPI Bank account 410,000 Petty Cash fund of which P10,000 is in currency; P7,200 in form of employees’ I.O.U.; and P2,800 is supported by approved petty cash vouchers for expenses all dated prior to closing of the books on December 31, 2022 20,000 Total P1,950,000 Less: Overdraft with…arrow_forward
- The Steamed Egg Company has the following items in its general ledger: Petty cash fund- P5,000; Checking account, Bank of Korea- P290,000; Cash fund legally restricted for short-term borrowings, Bank of Korea- P100,000; Checking account, BPI Bank- P(170,000); Checking account, Metrobank- P49,500. The amount of cash that should be reported in Steamed Egg’s balance sheet as a current asset is: a.P174,500 b. P344,500 c. P395,000 d.P374,500arrow_forwardThe cash account in Cake Company's ledger on December 31, 2023 showed a balance of P5,250,000 which included the following: Petty cash fund-P50,000 Undeposited receipts, including a postdated customer check of P100,000-P1,400,000 Cash in bank-P1,300,000 Cash in sinking fund-P500,000 Vouchers paid out of collections, not yet recorded-P250,000 IOUS signed by employees-P150,000 What total amount should be reported as cash in the December 31, 2023 statement of financial position?arrow_forwardA new accountant at Wyne Inc. is trying to identify which of the amounts shown below should be reported as the current asset “Cash and cash equivalents” in the year-end balance sheet, as of April 30, 2022. 1. $60 of currency and coin in a locked box used for incidental cash transactions.2. A $10,000 U.S. Treasury bill, due May 31, 2022.3. $260 of checks that Wyne has received from customers but not yet deposited.4. An $85 check received from a customer in payment of its April account, but postdated to May 1.5. $2,500 in the company’s checking account.6. $4,800 in its savings account.7. $75 of prepaid postage in its postage meter.8. A $25 IOU from the company receptionist. Instructions a. What balance should Wyne report as its “Cash and cash equivalents” balance at April 30, 2022?b. In what account(s) and in what financial statement(s) should the items not included in “Cash and cash equivalents” be reported? ProblemsIdentify internal control principles over cash disbursements.arrow_forward
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning