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Topic: Cash Flow Statement Hopper company is preparing its Cash Flow Statement. The accountant preparing the...

Topic: Cash Flow Statement

Hopper company is preparing its Cash Flow Statement. The accountant preparing the statement is presented with the following information:

Bank Account A $35,000

Bank Account B $16,500

Bank Account C $(1,200)

Requirement: What amount should appear as cash and cash equivalents in the cash flow statement?

Provide specific Codification references.

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Answer #1

Bank overdraft is treated as negative cash balance. It is deducted while calculating cash and cash equivalents.

But, other view is to disclose the same as Cash Flow from Financing Activities.

So if adopt to shown in Cash and Cash Equivalents the balance will be shown as $ 50,300,

The same answer will appear as balance in Cash and Cash equivalents if we show such Neagtive Bank Balance in Cash flow from Fianncing Activities

Under both the option Balance will not change but Presentation in Cash Flow statement Changes

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