Question

Logistics Company had the following items listed in its trial balance at 12/31/2018: Balance in checking account, Bank of the East $ 382,000 Treasury bills, purchased on 11/1/2018, mature on 1/30/2019 19,000 Loan payable, long-term, Bank of the East 330,000 Included in the checking account balance is $49,000 of restricted cash that Bank of the East requires as a compensating balance for the $330,000 note. What amount will Logistics include in its year-end balance sheet as cash and cash equivalents

Answer 1

Answer: $352,000

Explanation:

The information needed to calculate the cash and cash equivalent are:

Balance in checking account, Bank of the East = $ 382,000

The restricted cash included in the checking account = $49,000

Treasury bills = $19,000

We subtract the restricted cash from the balance in the checking account and then add it to the treasury bills. This will be:

= ($382,000 - $49,000) + $19,000

= $333,000 + $19,000

= $352,000