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Cash and Cash Equivalents Analysis

The document provides details of cash balances for three different companies - Lamentable Company, Baloney Company, and Kindred Company - on December 31, 2016. It includes information on cash in bank accounts, time deposits, petty cash funds, cash on hand, and restricted cash balances. It asks what total amount should be reported as "cash and cash equivalents" or just "cash" for each company based on the details and accounting guidelines provided.

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Jao Flores
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34 views2 pages

Cash and Cash Equivalents Analysis

The document provides details of cash balances for three different companies - Lamentable Company, Baloney Company, and Kindred Company - on December 31, 2016. It includes information on cash in bank accounts, time deposits, petty cash funds, cash on hand, and restricted cash balances. It asks what total amount should be reported as "cash and cash equivalents" or just "cash" for each company based on the details and accounting guidelines provided.

Uploaded by

Jao Flores
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Problem 7 – 19:

On December 31, 2016, Lamentable Company had the following cash balances:

Cash in bank – current account 6,000,000


Petty cash fund (all funds were reimbursed at year – end) 50,000
Time deposit – three months, due January 15, 2017 2,500,000
Saving deposit 1,000,000

Cash in bank included P 400,000 of compensating balance against short term borrowing
arrangement. The compensating balance is legally restricted as to withdrawal.

What total amount should be reported as “cash and cash equivalents”?

a) 9,500,000
b) 9,150,000
c) 9,100,000
d) 6,950,000

Problem 7 – 20:

Baloney Company had the following account balances on December 31, 2016:

Cash in bank 2,250,000


Cash on hand 125,000
Cash restricted for addition to plant in 2017 1,600,000

Cash in bank included P 600,000 of compensating balance against short – term borrowing
arrangement. The compensating balance is not legally restricted as to withdrawal.

What total amount should be reported as “Cash” on December 31, 2016?

a) 1,775,000
b) 2,250,000
c) 2,375,000
d) 3,975,000

Problem 7 – 21:

Kindred Company had the following account balances on December 31, 2016.

Petty cash fund 50,000


Cash in bank – current account 4,000,000
Cash in bank – sinking fund 2,000,000
Cash on hand 500,000
Money market placement with maturity of 3 months 1,000,000
The cash on hand included a P 100,000 check payable to Kindred Company dated January 15,
2017.

In exchange for a guaranteed line of credit, the entity has agreed to maintain a minimum
balance of P 200,000 in the unrestricted current bank account.

What total amount should be reported as “Cash” on December 31, 2016?

a) 6,450,000
b) 4,450,000
c) 7,450,000
d) 6,250,000

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