Question

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

1. Commercial savings account of $605,600 and a commercial checking account balance of $890,400 are held at First National Bank of Yojimbo.

2. Money market fund account held at Volonte Co. (a mutual fund organization) permits Sandhill to write checks on this balance, $5,414,600.

3. Travel advances of $181,000 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 $1,492,300 is restricted for the retirement of long-term debt.

5. Petty cash fund of $1,500.

6. An I.O.U. from Marianne Koch, a company customer, in the amount of $166,300.

7. A bank overdraft of $127,800 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 company has two certificates of deposit, each totaling $504,200. These CDs have a maturity of 120 days.

9. Sandhill has received a check that is dated January 12, 2018, in the amount of $114,250.

10. Sandhill has agreed to maintain a cash balance of $547,000 at all times at First National Bank of Yojimbo to ensure future credit availability.

11. Sandhill has purchased $2,115,100 of commercial paper of Sergio Leone Co. which is due in 60 days.

12. Currency and coin on hand amounted to $8,220.

(a) Compute the amount of cash and cash equivalents to be reported on Sandhill Co.’s balance sheet at December 31, 2017.

The amount of Cash and Cash Equivalents reported on December 31, 2017 is: _____________

Answer 1

Requirement a:- Compute the amount of cash and cash equivalents to be reported on Sandhill Co.’s balance sheet at December 31, 2017.

Solution:- The amount of Cash and Cash Equivalents reported on December 31, 2017 is: $9,035,420

Calculation of amount of cash and cash equivalents reported on Sandhill co. Particulars Amount Commercial Saving Account Commercial Checking Amount Balance Money Market Fund Account Petty Cash Fund $605,600 $890,400 $5,414,600 $1,500 $2,115,100 $8,220 $9,035,420 Commercial Paper Currency and Coins on Hand Total Cash and Cash Equivalents to be reported

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