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    fkchegg.com

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    misssunshine112
    This document contains solutions to 3 accounting questions regarding calculating cash and cash equivalents amounts to be reported on statements of financial position. For the first question, the amount is $8,310,424, calculated from various cash accounts. For the second question, the amount is $2,955,000, determined by adjusting Athena Co.'s cash accounts for outstanding checks. For the third question, the amount is also $8,310,424.

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    fkchegg.com

    Uploaded by

    misssunshine112
    2K views4 pages
    This document contains solutions to 3 accounting questions regarding calculating cash and cash equivalents amounts to be reported on statements of financial position. For the first question, the amount is $8,310,424, calculated from various cash accounts. For the second question, the amount is $2,955,000, determined by adjusting Athena Co.'s cash accounts for outstanding checks. For the third question, the amount is also $8,310,424.

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    This document contains solutions to 3 accounting questions regarding calculating cash and cash equivalents amounts to be reported on statements of financial position. For the first question, the amount is $8,310,424, calculated from various cash accounts. For the second question, the amount is $2,955,000, determined by adjusting Athena Co.'s cash accounts for outstanding checks. For the third question, the amount is also $8,310,424.

    Copyright:

    © All Rights Reserved
    2K views4 pages

    fkchegg.com

    Uploaded by

    misssunshine112
    This document contains solutions to 3 accounting questions regarding calculating cash and cash equivalents amounts to be reported on statements of financial position. For the first question, the amount is $8,310,424, calculated from various cash accounts. For the second question, the amount is $2,955,000, determined by adjusting Athena Co.'s cash accounts for outstanding checks. For the third question, the amount is also $8,310,424.

    Copyright:

    © All Rights Reserved
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    4/16/2021 https://fkchegg.com/cg24/?auth=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.

    eyJ1dWlkIjoiYzMwMjFkOTctNGIwNC00N2UxLTk1YTYtZmYyNDQ5O…

    Question

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    Answer
    2. b. 8,310,424

    8,310,424 is the correct amount of cash and cash equivalents to be reported in Paulaner Co.'s 20x1 statement
    of financial position.

    Calculation of cash and cash equivalents

    1.Petty cash fund 15,000


    2.Cash on hand 45,000
    3.Cash in bank 7,809,424
    4.Investment in 90 day commercial paper 150,000
    5.Tax fund 56,000
    6.Payroll fund 2,35,000
    Cash and cash equivalents at Dec 31, 20x1 8,310,424

    Note: 180 day certificate of deposit of 80,000 have a life of about 6 months. Cash and cash equivalents
    includes the securities which is having a life of less than 3 months. So, this certificate of deposit is not considered
    here.

    Plant expansion fund and Sinking fund are not considered under cash and cash equivalents. Because,
    these two items are comes under long- term investment. So, it should be come under the long term investment in
    the Balance Sheet.

    3. c. 2,955,000

    In its Dec 31, 20x1 financial statements, 2,955,000 is the amount of cash should Athena Co. report.

    Calculation of cash

    Only currencies and coins should be part of cash. Remaining 4,000 should not be part of
    cash.
    Petty cash
    6,000
    fund

    Reported as cash

    Cash on
    65,000
    hand

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    4/16/2021 https://fkchegg.com/cg24/?auth=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJ1dWlkIjoiYzMwMjFkOTctNGIwNC00N2UxLTk1YTYtZmYyNDQ5O…

    Reported as cash

    Cash in
    2,890,000
    bank

    It is already reported in cash in bank. In the explanation, it clearly states that all the checks
    were recorded when they were collected. The check were collected on 29th December. The
    Customer's cash in bank given in the question is on Dec 31. So, it doesn't want to add again.
    check
    #109

    The check is collected only on Jan 8, 20x2. So, it is not part of 20x1's statement. So, it
    Customer's would be deducted from the cash in bank.
    check (20,000)
    #392

    It is an undelivered check. This question clearly states that, "Athena co. held the following
    items." So, this check is in the hands of Athena co. and not with the creditor. The cash is
    Athena deducted when the check is drawn. At 31st Dec the check is in still in the hands of Athena
    Co.'s co. So, it would be added back to cash in bank.
    54,000
    check
    #567

    The cash is added when the check is collected. NSF check means check dishonoured with
    NSF check (40,000)
    non sufficient balance. So, the added cash will be deducted from the cash in bank.

    1.Petty cash fund 6,000


    2.Cash on hand 65,000
    3.Cash in bank 2,890,000
    4.Customer's check #392 (20,000)
    5.Athena co.'s check #56754,000
    6.NSF check (40,000)
    Cash 2,955,000

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