BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
133 views

Greenfield Company had the following cash balances at December 31, 2019:

Chapter 6, Problem 2MC, Greenfield Company had the following cash balances at December 31, 2019: Cash in banks includes

Cash in banks includes $300,000 of compensating balances against short-term borrowing arrangements at December 31, 2019. The compensating balances are not legally restricted as to withdrawal by Greenfield. In the current assets section of Green-field’s December 31, 2019, balance sheet, what total amount should be reported as cash?

  1. a. $1,020,000
  2. b. $1,320,000
  3. c. $3,020,000
  4. d. $3,320,000

To determine

State the amount of cash that must be reported on the balance sheet of Company G.

Explanation

Cash:

Cash is the most liquid asset and it is the source used to engage in the day-to-day transactions of business, payment made to employees, taking advantage of opportunities available in business and meeting the debt obligations of company.

Justification for the incorrect options of a, c and d:

$1,020,000, $3,020,000 and $3,320,000 are not reported as the cash balance on the Company G’s balance sheet as on December 31, 2019.

Justification for the correct option b:

Compute the amount of cash reported on the balance sheet of Company G:

Cashbalance=(Cashinbanks+Petty

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

ADJUSTING COST OF CAPITAL FOR RISK Ziege Systems is considering the following independent projects for the comi...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)