ID wk2 graded upload - Chapter 7 E7-2 (Determin Cash...

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Chapter 7 E7-2 (Determin Cash Balance) Presented below are a number of independent situations (LO 1) Instructions For each individual situation determin the amount that should be reported as cash. If the item(s) is not reported as cash, explain the rationale. 1) reported as cash: Checking account balance: $925,000 Not reported as cash: Reason: Certificate of Deposit $1,400,000 The securities usually contain restrictions or penalities on their conversion to cash Utility deposit paid to gas comp 180 expense Cash advance to subsidiary of 980,000 This is considered accounts receivable 2) Reported as cash: Checking account balance $600,000 Coins and currency on hand 1,350 petty cash 300 Not reported as cash: Reason: an overdraft in psecial checking acct $17,000 if used it would be a liability since the organization would owe the amount back to the bank cash held in a bond sinking fund 20,000 this would be an investment 3) Reported as cash: Checking account balanced $590,000 Certified check from customer 9,800 Cash restricted due to maintaining compensating balance 100,000 Not reported as cash: Reason: Postage stams on hand 620 expense 4) Reported as Cash Reason: Checking account balance $700,000 Not reported as cash: Reason: Money market balance at mutal fund (has checking privileges) 48,000 The securities usually contain restrictions or penalities on their conversion to cash NSF check received from customer 800 will turn into ar since the customer will now be billed 5) Reported as Cash Reason: Checking account balance $700,000 cash restricted for future plant expanision 500,000 refundable deposit of 26,000 Cash advance received from customer 900 Not reported as cash: Reason: Short-term treasury bill $180,000 The securities usually contain restrictions or penalities on their conversion to cash /// investment Cash advance of 7000 to company executive payable on demand 7,000 trade receivable EXERCISE 7-2 1 2Cash balance is $584,650 computed as follows: Checking account balance $600,000 Overdraft -17,000 Petty cash 300 Coin and currency 1,350 $584,650 3 Cash balance is $599,800 computed as follows: Checking account balance $590,000 Certified check from customer 9,800 $599,800 4 Cash balance is $85,000 computed as follows:
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This note was uploaded on 01/14/2012 for the course ACCOUNTING ACC 422 taught by Professor Unknown during the Spring '11 term at University of Phoenix.

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ID wk2 graded upload - Chapter 7 E7-2 (Determin Cash...

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