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Chapter 7: 1BE (page 363)

Kraft Enterprises owns the following assets at December 31, 2017.

Cash in bank – saving account

68,000

Checking account balance

17,000

Cash on hand

9,300

Post-dated Checks

750

Cash refunded due from IRS

31,400

Certificate of deposits (180-days)

90,000

What amount should be reported as cash?

Short Answer

Expert verified

The cash balance is $94,300.

Step by step solution

01

Definition of Certificate of Deposits

The certificate issued by the bank to an account holder depositing fixed money for a fixed period of time is known as a certificate of deposit. The bank will pay interest against such a deposit.

02

Calculation of cash balance

Particular

Amount $

Cash in bank – Saving account

$68,000

Add: Cash on hand

9,300

Add: Checking account balance

17,000

Cash Balance

$94,300

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Most popular questions from this chapter

3. Which of the following statements is false?

(a) Receivables include equity securities purchased by the company.

(b) Receivables include credit card receivables.

(c) Receivables include amounts owed by employees as a result of company loans to employees.

(d) Receivables include amounts resulting from transactions with customers.

(Petty Cash) Carolyn Keene, Inc. decided to establish a petty cash fund to help ensure internal control over its small cash expenditures. The following information is available for the month of April.

1. On April 1, it established a petty cash fund in the amount of \(200.

2. A summary of the petty cash expenditures made by the petty cash custodian as of April 10 is as follows

Delivery charges paid on merchandise purchased

\)60

Supplies Purchased and used

25

Postage expenses

33

I.O.U from employees

17

Miscellaneous expenses

36

The petty cash fund was replenished on April 10. The balance in the fund was \(27.

3. The petty cash fund balance was increased \)100 to $300 on April 20.

Instructions

Prepare the journal entries to record transactions related to petty cash for the month of April

Arness Woodcrafters sells \(250,000 of receivables to Commercial Factors, Inc. on a with recourse basis. Commercial assesses a finance charge of 5% and retains an amount equal to 4% of accounts receivable. Arness estimates the fair value of the recourse liability to be \)8,000. Prepare the journal entry for Arness to record the sale.

Indicate how the percentage-of-receivables method, based on an aging schedule, accomplishes the objectives of the allowance method of accounting for bad debts. What other methods, besides an aging analysis, can be used for estimating uncollectible accounts?

Recent financial statements of General Mills, Inc. report net sales of \(12,442,000,000. Accounts receivable are \)912,000,000 at the beginning of the year and $953,000,000 at the end of the year. Compute General Mills’ accounts receivable turnover. Compute General Mills’ average collection period for accounts receivable in days.
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