Question

Q2/

A first-year co-op student is trying to determine the amount of cash and cash equivalents that should be reported on a company’s statement of financial position. The following information was provided to the student at year end:

1.		Cash on hand in the cash registers totals $3,160.
2.		The balance in the commercial bank savings account is $53,600 and in the commercial bank chequing account, $22,000. The company also has a U.S. bank account, which contains the equivalent of $30,000 Canadian at year end.
3.		A special bank account holds $220,000 in cash that is restricted for equipment replacement.
4.		Amounts due from employees (travel advances) total $9,500.
5.		Held-for-trading investments held by the company include:
(i)		$24,000 in a term deposit maturing in 120 days.
(ii)		A Government of Canada bond for $53,000 that falls due in 30 days.
(iii)		$34,000 in shares of Loblaw Companies Limited.
6.		The company has $1,130 of NSF cheques from customers that were returned by the bank. NSF fees charged by the bank for processing these cheques totalled $57.
7.		The company keeps $11,000 as a compensating balance with respect to a long-term loan in a special account.

Determine which items listed above would be considered to be cash and which would be considered to be cash equivalents. (Choose Not Applicable if there is no answer for space provided. Do not leave any field blank.)

Items No.
1.		select a type of cash                                 Restricted CashCash EquivalentsCashNot Applicable
2.		select a type of cash                                 CashCash EquivalentsNot ApplicableRestricted Cash
3.		select a type of cash                                 CashCash EquivalentsNot ApplicableRestricted Cash
4.		select a type of cash                                 CashRestricted CashNot ApplicableCash Equivalents
5.(i)		select a type of cash                                 CashCash EquivalentsRestricted CashNot Applicable
5.(ii)		select a type of cash                                 CashNot ApplicableCash EquivalentsRestricted Cash
5.(iii)		select a type of cash                                 Cash EquivalentsCashRestricted CashNot Applicable
6.		select a type of cash                                 Not ApplicableCashRestricted CashCash Equivalents
7.

What combined amount would the company report as cash and cash equivalents on the year-end statement of financial position?

Cash and cash equivalents

dentify where any items that were not reported as cash and cash equivalents above should be reported. (Do not leave any field blank. For items which are included in (a) put “Not Applicable”.)

ItemsNo.
1.		select where the item should be reported                                 Not ApplicableAccounts ReceivableCurrent AssetsNon-Current AssetsCurrent Assets or Non-Current Assets
2.		select where the item should be reported                                 Non-Current AssetsCurrent AssetsCurrent Assets or Non-Current AssetsAccounts ReceivableNot Applicable
3.		select where the item should be reported                                 Current Assets or Non-Current AssetsAccounts ReceivableNot ApplicableCurrent AssetsNon-Current Assets
4.		select where the item should be reported                                 Not ApplicableCurrent AssetsAccounts ReceivableNon-Current AssetsCurrent Assets or Non-Current Assets
5.(i)		select where the item should be reported                                 Current AssetsNot ApplicableAccounts ReceivableCurrent Assets or Non-Current AssetsNon-Current Assets
5.(ii)		select where the item should be reported                                 Current AssetsNot ApplicableAccounts ReceivableCurrent Assets or Non-Current AssetsNon-Current Assets
5.(iii)		select where the item should be reported                                 Non-Current AssetsCurrent Assets Accounts Receivable Not Applicable Current Assets or Non-Current Assets
6.		select where the item should be reported                                 Current Assets or Non-Current AssetsAccounts ReceivableNot Applicable Non-Current Assets Current Assets
7.		select where the item should be reported

Answer 1

Sl No.	Description	Type of cash	Amount
1	Cash in Hand as per cash register	Cash	$3,160
2	Balance in Commercial Bank Saving account	Cash	$53,600
	Balance in Commercial Bank Chequing account	Cash	$22,000
	Balance in U.S Bank account	Cash	$30,000
3	Balance in Special Bank account restricted for equipment replacement	Cash	$2,20,000
4	Amount due from employees	Not Applicable	$0
5 (i)	Term deposit maturing in 120 days	Cash Equivalent	$24,000
5 (ii)	Government of Canada Bond due in 30 days	Cash Equivalent	$53,000
5 (iii)	Shares of Lablaw companies Limited	Not Applicable	$34,000
6	NSF Cheques in Hand	Not Applicable	$0
7	Compensating balance in special Account	Cash	$11,000
		Total Cash and Cash Equivalents	$4,50,760
	Items that were not reported as cash and cash equivalents above should be reported
	Description	Item should be reported as	Amount
	Amount due from employees	Accounts Receivable	$9,500
	Shares of Lablaw companies Limited	Current Assets or Non-Current Assets	$34,000
	NSF Cheques in Hand	Not Applicable	$1,130