A first-year co-op student is trying to determine the amount of cash and cash equivalents that should be reported on a
A first-year co-op student is trying to determine the amount of cash and cash equivalents that should be reported on a company's balance sheet. The following information was given to the student at year end:
1. The cash fl oat for the cash registers totals $500.
2. The balance in the Petty Cash account is $300. At year end, the fund had $125 cash and receipts totaling $175.
3. The balance in the company's chequing account is $24,500. The company also has a U.S. bank account, which contained the equivalent of $16,000 Canadian at year end.
4. The company has overdraft protection of $10,000 on its chequing account.
5. The company has a separate bank account with a balance of $4,250. This consists of cash deposits paid by tenants who lease office space from the company. The deposits will be refunded to the tenants at the end of their leases.
6. The company has $14,500 of postdated cheques from customers for payment of accounts receivable.
7. The company has the following short-term investments:
â€¢ $25,000 in treasury bills with a maturity date of less than 90 days
â€¢ $36,000 in shares of Reitmans (Canada) Limited
â€¢ $12,000 in a Guaranteed Investment Certificate that matures in six months.
8. The balance in the company owner's personal bank account is $2,150.
9. The company has NSF cheques from customers totalling $875 that were returned by the bank.
(a) Calculate the amount of cash and cash equivalents that should be reported on the year-end balance sheet as a current asset.
(b) Identify where any items that were not reported as cash and cash equivalents in (a) should be reported.
Taking It Further
Why are restricted cash balances presented separately from cash?