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Cash and Cash Equivalents Problem 4

The document contains multiple choice questions and solutions related to cash and cash equivalents. It provides details of cash account balances, adjustments, and reconciliations for different periods. The key information includes unadjusted cash balances, adjustments for items like post-dated checks, compensating balances, and investments in determining the reported cash and cash equivalents balance.

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Carel Joy Andalajao
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415 views2 pages

Cash and Cash Equivalents Problem 4

The document contains multiple choice questions and solutions related to cash and cash equivalents. It provides details of cash account balances, adjustments, and reconciliations for different periods. The key information includes unadjusted cash balances, adjustments for items like post-dated checks, compensating balances, and investments in determining the reported cash and cash equivalents balance.

Uploaded by

Carel Joy Andalajao
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Cash and Cash Equivalents

PROBLEM 4: MULTIPLE CHOICE – COMPUTATIONAL

1. A

Solution:
Unadjusted balance 8,200,000
Post-dated customer check (82,000)
Post-dated check drawn 40,000
Bank draft (53K x (51.4 - 52.5) (58,300)
Bonds 200,000
Compensating balance (900,000)
Cash and Cash Equivalents – Dec. 31, 20x1 7,399,700

2. A

Solution:
Petty cash fund (15,000 - 9,763) 5,237
Cash on hand 45,000
Cash in bank 7,809,424
Investment in 90-day commercial paper, due 1/26/x2 150,000
Tax fund 56,000
Payroll fund 235,000
Total Cash and Cash equivalents 8,300,661

3. C

Solution:
Petty cash fund 6,000
Cash on hand 65,000
Cash in bank (per ledger) 2,890,000

This study source was downloaded by 100000861025909 from CourseHero.com on 01-26-2023 06:22:55 GMT -06:00

https://www.coursehero.com/file/155511838/Cash-and-Cash-Equivalents-Problem-4-millandocx/
Customer’s check #392 – dated Jan. 8, 20x2 (20,000)
Athena Co.’s check #567 – dated Dec. 29, 20x1 54,000
NSF check (40,000) 2,884,000
Cash - Dec. 31, 20x1 2,955,000

 Customer’s check #109 was properly included in cash in bank; thus, no


adjustment is necessary.
 Customer’s check #392 is postdated. This should be excluded from Cash
and reverted back to Accounts receivable.
 Athena Co.’s check #567 is ‘unreleased check’. This should be included
in cash and reverted back to Accounts payable.
 The NSF check should be excluded from cash and reverted back to
Accounts receivable.

4. D

Solution:
Office supplies expense 8,025
Miscellaneous selling expense 11,533
Miscellaneous administrative expense 7,805
Cash short or over 197
Cash in bank (40K – 12,834) 27,166

5. A (see solution above)

This study source was downloaded by 100000861025909 from CourseHero.com on 01-26-2023 06:22:55 GMT -06:00

https://www.coursehero.com/file/155511838/Cash-and-Cash-Equivalents-Problem-4-millandocx/
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