[margieortega]

Can someone tell me if I did the following exercise correct? Thanks, Margie


E7-2 (Determine Cash Balance) Presented below are a number of independent situations.
Instructions:
For each individual situation, determine the amount that should be reported as cash. If the item(s) is not reported as cash, explain the rationale.


1. Checking account balance $925,000; certificate of deposit $1,400,000; cash advance to subsidiary of
$980,000; utility deposit paid to gas company $180.

Reported Not Reported
Checking acct 925,000 1,400,000 short-term investment
980,000 accounts receivable
180 other asset
Total 925,000 2,380,180


2. Checking account balance $600,000; an overdraft in special checking account at same bank as normal checking account of $17,000; cash held in a bond sinking fund $200,000; petty cash fund $300; coins and currency on hand $1,350.

Reported Not Reported
Checking acct 600,000 17,000 accounts payable
Coins/currency 1,350
Petty cash 300
Total 601,650 17,000

3. Checking account balance $590,000; postdated check from customer $11,000; cash restricted due to maintaining compensating balance requirement of $100,000; certified check from customer $9,800; postage stamps on hand $620.

Reported Not Reported
Checking acct 590,000 11,000 accounts receivable
Compensating bal 100,000 620 stamps on hand
Certified check 9,800
Total 699,800 11,620


4. Checking account balance at bank $37,000; money market balance at mutual fund (has checking privileges) $48,000; NSF check received from customer $800.

Reported Not Reported
Checking acct 37,000 800 accounts receivable
Money market 48,000
Total 85,000 800

5. Checking account balance $700,000; cash restricted for future plant expansion $500,000; short-term Treasury bills $180,000; cash advance received from customer $900 (not included in checking account balance); cash advance of $7,000 to company executive, payable on demand; refundable deposit of $26,000 paid to federal government to guarantee performance on construction contract.

Reported Not Reported
Checking acct 700,000 180,000 short term investment
Cash advance 900 500,000 long-term
Refundable dep 26,000 7,000 accounts receivable
Total 726,900 687,000