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At December 31, Y1, ABC had the following balances in the accounts it maintains at D Bank and Z Bank: Checking account - D Bank: $200,000 Checking...

  1. At December 31, Y1, ABC had the following balances in the accounts it maintains at D Bank and Z Bank:


Checking account - D Bank: $200,000

Checking account - D Bank: (10,000)

Checking account Z Bank: (5,000)

Money market account with check cashing privileges: 50,000

90-day CD, due 2/28/Y2: 25,000

180-day CD, due 4/15/Y2: 75,000


On its December 31, Y1, balance sheet, what amount should ABC report as cash and cash equivalents?

  1. $210,000
  2. $265,000
  3. $335,000
  4. $225,000


I worked through this and didn't get an answer listed here. I'm pretty sure I know and understand (or thought I knew and understood) how different items are classified in each of the current asset accounts on the balance sheet, but I'm clearly messing up somewhere and would like some help in understanding why. If someone could please help me out, I would greatly appreciate it. Thank you!

Top Answer

The cash and cash equivalents... View the full answer

2 comments
  • Thank you so much! Your explanation definitely refreshed my memory. I completely forgot about the fact that Z bank is a liability account since it's the only negative balance ABC has in that account and therefore cannot be offset by the positive amount in D Bank. I knew that but completely forgot to apply that here. Thank you very much!
    • Lolo07220207
    • May 02, 2018 at 11:11pm
  • You're welcome :)
    • dinamarcanete
    • May 02, 2018 at 11:46pm

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