The amount to be reported in the financial statement is $56,380.
CASH AND CASH EQUIVALENTS | |||
First National Bank | East Bay Bank | Total | |
Balance in Checking Account | 13500 | 0 | 13500 |
Undeposited customer checks | 5200 | ||
Currency and Coins on Hand | 580 | ||
Balance in Savings Account | 22100 | 0 | 22100 |
US Treasury Bills | 15000 | ||
Cash and Cash Equivalents | 56380 |
(The presentation is tweaked for better understanding)
Notes to the working :
1. Balances available with First National Bank are unrestricted and
shall form part of the cash and cash equivalents for the reporting
purposes.
2. Undeposited Customer checks shall be part of cash and cash equivalents as they can be deposited and encashed as and when required.
3. Currency notes and coins are part of cash and cash equivalent financial statement line item.
4. The amount lying in East Bay Bank savings account shall be represented as a non-current asset in the financial statement as the same is earmarked for peculiar reason of expansion, further the same shall be used after the period of 1 year, the same should be reported as Non-current asset.
5.Amount lying in Checking account of East Bay Bank is restricted in the nature of credit collateral, and hence cannot be used by the entity due to the restriction imposed by bank till the maturity of the loan, hence not to be part of Cash and Cash Equivalents.
6.Marketable securities which are due within the period of 90 days is classified as cash and cash equivalent. However, those of higher maturities shall be classified as 'Other Current Investments' in the financial statements. Therefore, 2-month maturity bills shall form part of cash and cash equivalents while those of 7-month maturity will not.
The controller of the Red Wing Corporation is in the process of preparing the company's 2016...
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