Question

Consider the following: Cash in Bank - checking account of $13,500, Cash on hand of $500, Post-dated checks received totaling $3,500, and Certificates of deposit totaling $124,000.

How much should be reported as cash in the statement of financial position?
a. $ 13,500.b. $ 14,000.c. $ 17,500.d. $131,500.

Answer 1

=b. $ 14,000.

Step-by-step explanation:

Cash to reported in the statement of Financial Position= Checking account balance+ Cash on hand

= $13,500+$500

=$14,000

Post-dated checks received is not considered as cash because cash has not been received. Cash is expected in the future when the checks are presented for payment and it is hourned.

Certificates of deposit is a tenured deposit or fund which cannot be withdrawn on demand without a notice or expiration of the period in the agreement.

Checking account balance can be converted to cash immediately.

Answer 2

b. $ 14,000

Step-by-step explanation:

For closing balance of cash in the statement of financial position, only cash received and on hand is recorded. Post dated checks probably have not been presented to the bank yet and thus would not be included. Certificates of deposit correspond to savings account and thus will not be part of the checking or hard cash account. The only amounts to be recorded on balance sheet are,

Cash = 13,500 + 500 = $14,000

Hope that helps.