Homework - Ch 7

Homework - Ch 7 - Exercise 7-1 cash and cash equivalents;...

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Exercise 7-1 cash and cash equivalents; noncash item classification Requirement 1 Cash and cash equivalents includes: a. Balance in checking account $13,500 Balance in savings account 22,100 b. Undeposited customer checks 5,200 c. Currency and coins on hand 580 f. U.S. treasury bills with 2-month maturity 15,000 Total $56,380 Requirement 2 d. The $400,000 savings account will be used for future plant expansion and therefore should be classified as a noncurrent asset, either in other assets or investments . e. The $20,000 in the checking account is a compensating balance for a long-term loan and should be classified as a noncurrent asset, either in other assets or investments . f. The $20,000 in 7-month treasury bills should be classified as a current asset along with other temporary investments.
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Exercise 7-3 gross and net methods for cash (sales) discounts Requirement 1 Sales price = 100 units x $600 = $60,000 x 70% = $42,000 November 17, 2006 Accounts receivable . ....................................................... 42,000 Sales revenue . ............................................................. 42,000 November 26, 2006 Cash (98% x $42,000) ........................................................ 41,160 Sales discounts (2% x $42,000) ......................................... 840 Accounts receivable . ................................................... 42,000 Requirement 2 November 17, 2006 Accounts receivable . ....................................................... 42,000 Sales revenue . ............................................................. 42,000 December 15, 2006 Cash . ............................................................................... 42,000 Accounts receivable . ................................................... 42,000
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Exercise 7-3 (concluded) Requirement 3 Requirement 1: November 17, 2006 Accounts receivable . ....................................................... 41,160 Sales revenue (98% x $42,000) ...................................... 41,160 November 26, 2006 Cash . ............................................................................... 41,160
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This note was uploaded on 09/27/2008 for the course BUS 1000 taught by Professor Professor during the Spring '08 term at Cal Poly.

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Homework - Ch 7 - Exercise 7-1 cash and cash equivalents;...

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