Question

The controller for Clint Eastwood Co. is attempting to determine the amount of cash to be reported on its December 31, 2017 balance sheet. The following is provided.

1. Commercial savings account of $600,000 and a commercial checking account balance of $900,000 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 of $180,000 for executive travel for the first quarter of next year (employee to reimburse through salary reduction)

4. A separate cash fund in the amount of $1,500,000 is restricted for the retirement of long-term debt.

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 comp[any has two certificates of deposits, each totaling $500,000. These CDs have a maturity of 120 days.

Answer 1

The amount of cash to be reported on Clint Eastwood Co.'s December 31, 2017 balance sheet is $8,871,000.

Step-by-step explanation:

The amount of cash to be reported on Clint Eastwood Co.'s December 31, 2017 balance sheet is calculated by considering a combination of cash and cash equivalents. Cash and cash equivalents include:

1. Commercial savings account and commercial checking account balances at First National Bank of Yojimbo - $600,000 + $900,000 = $1,500,000
2. Money market fund account at Volonte Co. - $5,000,000
3. Travel advances - $180,000
4. Petty cash fund - $1,000
5. I.O.U. from Marianne Koch - $190,000
6. Bank overdraft - $0 (since the company has no deposits at the bank)
7. Certificates of deposits - $1,000,000

Total cash to be reported on the balance sheet = $1,500,000 + $5,000,000 + $180,000 + $1,000 + $190,000 + $0 + $1,000,000 = $8,871,000. Therefore, the amount of cash to be reported on Clint Eastwood Co.'s December 31, 2017 balance sheet is $8,871,000.

Answer 2

The answer and procedures of the exercise are attached in the following image.

Explanation

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.