2009-05-04_005227_E7-2

2009-05-04_005227_E7-2 - ANSWER KEY EXERCISE 7-2 1 Cash...

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ANSWER KEY EXERCISE 7-2 1. Cash balance of $925,000. Only the checking account balance should be reported as cash. The certificates of deposit of $1,400,000 should be reported as a temporary investment, the cash advance to subsidiary of $980,000 should be reported as a receivable, and the utility deposit of $180 should be identified as a receivable from the gas company. 2. Cash 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 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 is $599,800 computed as follows: Checking account balance $590,000 Certified check from customer 9,800 $599,800 The postdated check of $11,000 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.
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4. Cash balance is $85,000 computed as follows:
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2009-05-04_005227_E7-2 - ANSWER KEY EXERCISE 7-2 1 Cash...

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