The
controller for Clint Eastwood Co. is attempting to determine the amount of cash
to be reported on its December 31, 2014, balance sheet. The following
information is provided.
E7-1 (Determining Cash Balance) The controller for Clint Eastwood Co. is attempting
to determine the amount of cash to be reported on its December 31, 2014,
balance sheet. The following information is provided.
1.
Commercial savings account has a balance of: $600,000 and a commercial checking
account has a balance of$900,000 Both are held at First National Bank of
Yojimbo.
2. Money
market fund account held at Volonte Co. (a mutual fund organization) permits
Eastwood to write checks on this balance, $5,000,000
3. Travel
advances for executive travel for the first quarter of the next year (employee
to reimburse through salary reduction) are: $180,000
4. A
separate cash fund is restricted for the retirement of long-term debt. Its balance
is $1,500,000
5. Petty
cash fund of: $1,000
6. An
I.O.U. from Marianne Koch, a company customer, in the amount of $190,000
7. A bank
overdraft of $110,000 has occurred at one of the banks the company uses to deposit
its cash receipts. At the present time, the company has no deposits at this
bank.
8. The
company has two certificates of deposit, each totalling $500,000 These CDs have
a maturity of 120 days.
9. Eastwood
has received a check that is dated January 12, 2015, in the amount of $125,000
10. Eastwood
has agreed to maintain a cash balance of $500,000 at all times at First
National Bank of Yojimbo to ensure future credit availability.
11. Eastwood
has purchased $2,100,000 of commercial paper of Sergio Leone Co. which is due
in 60 days.
12. Currency
and coin on hand amounted to $7,700
Instructions
(a) Compute
the amount of cash to be reported on Eastwood Co.’s balance sheet at December 31, 2014.
(b) Indicate
the proper reporting for items that are not reported as cash on the December
31, 2014, balance sheet.
TUTORIAL
PREVIEW
|
Cash for Eastwood includes the following:
|
|
|
1. Commercial savings account at First National
Bank of Yojimbo with a balance of:
|
$600,000
|
|
1. Commercial checking account at First National
Bank of Yojimbo with a balance of:
|
900,000
|
|
2. Money market fund account held at Volonte Co.:
|
5,000,000
|
File name: E7-1 Clint Eastwood Co.xls File type: xls PRICE: $6
