Presented below are a number of independent situations For e

Presented below are a number of independent situations. For each individual situation, determine the amount that should be reported as cash. 1. Checking account balance $931,500; certificate of deposit $1,414,400; cash advance to subsidiary of $985,850; utility deposit paid to gas company $183. Cash balance s 2. Checking account balance $519,300; an overdraft in special checking account at same bank as normal checking account of $17,590; cash held in a bond sinking fund $220,900; petty cash fund $400; coins and currency on hand $1,490. Cash balance 3. Checking account balance $630,200; postdated check from customer $9,970; cash restricted due to maintaining compensating balance requirement of $91,700 certified check from customer $10,634; postage stamps on hand $608. Cash balance s 4. Checking account balance at bank $45,900; money market balance at mutual fund (has checking privileges) $48,530; NSF check received from customer $378 Cash balance s

Solution

1.) Cash balance of $931,500. Only the checking account balance should be reported as cash. The certificates of deposit of $1,414,400 should be reported as a temporary investment, the cash advance to subsidiary of $985,850 should be reported as a receivable, and the utility deposit of $183 should be identified as a receivable from the gas company.

2.) Cash balance = 519300 - 17950 +400 +1490 = 503240

Cash held in a bond sinking fund is restricted. Assuming that the bonds are noncurrent, the restricted cash is also reported as noncurrent

3.) cash balance = 638200+ 10634 = 648834

The postdated check of $9970 should be reported as a receivable. Cash restricted due to compensating balance should be described in a note indicating the type of arrangement and amount. Postage stamps on hand are reported as part of office supplies inventory or prepaid expenses.

4.) cash balance = 45900+48530 = 94430

The NSF check received from customer should be reported as a receivable.

5.)cash balance = 756200 + 971 =757171

Cash restricted for future plant expansion of $518,100 should be reported as a noncurrent asset. Short-term treasury bills of $164,740 should be reported as a temporary investment. Cash advance received from customer of $971 should also be reported as a liability; cash advance of $7,300 to company executive should be reported as a receivable; refundable deposit of $28,500 paid to federal government should be reported as a receivable.