Question

A new accountant at Tamarisk, Inc. is trying to identify which of the amounts shown below should be reported as the current asset "Cash and cash equivalents" in the year- end balance sheet, as of April 30, 2017.1. $66 of currency and coin in a locked box used for incidental cash transactions.2. A $10,900 U.S. Treasury bill, due May 31, 2017.3. $290 of April-dated checks that Tamarisk has received from customers but not yet deposited.4. An $92 check received from a customer in payment of its April account, but postdated to May 1.5. $2,890 in the company's checking account.6. $7,290 in its savings account.7. $66 of prepaid postage in its postage meter.8. A $36 IOU from the company receptionist.What balance should Tamarisk report as its "Cash and cash equivalents" balance at April 30, 2017?

Answer 1

Answer:

Total cash and cash equivalent: 21,528

Explanation:

1. petty fund: 66 It does count as is cash.

2. The TB is due within 90 days. It does count: 10,900

3. The check can be convert into cash. Do count as cash: 290

4. Within 90-days It is a cash equivalent:  92

5. Company's checking account: 2,890

6. Savings accounts: 7,290

7. the postage meter cannot convert into cash.

8. The IOU from the receptionist will discount from his paycheck it cannot convert into check.

Total cash:

66 + 10,900 + 290 + 92 + 2,890 + 7,290 = 21,528