Question

Problem 1-10 (AICPA Adapted) Tranvia Company revealed the following information on December 31, 2019: 350,000 750,000 Cash in checking account Cash in money market account Treasury bill, purchased November 1, 2019 maturing January 31, 2020 Time deposit purchased December 1, 2019 maturing March 31, 2020 3,500,000 4,000,000 What amount should be reported as cash and cash equivalents on December 31, 2019? a. 1,100,000 b. 3,850,000 C. 4,600,000 d. 8,600,000 Problem 1-11 (IAA) 7-13 Affable Company provided the following information at year-end comprising the cash account: Cash in bank-demand deposit Cash on hand Postage stamps unused Certificate of time deposit Money order Manager check Traveler check Postdated customer check 5,000,000 400,000 5,000 1,500,000 50,000 100,000 1,000,000 500,000 What total amount should be reported as cash at year-end? a. 8,050,000 b. 7,050,000 c. 6,550,000 d. 6,450,000

Hello! My professor said that we should prepare our answers or solutions in a worksheet. How should I do it (cash and cash equivalents) in a worksheet? Thank you.

Answer 1

Cash and Cash equivalents = cash + Treasury bills + Cash in money market + Postage stamps (petty cash) + Any Cheque + Money order

We do not include time deposits in Cash equivalents

Question 1

Cash in checking account	350000
Cash in money market	750000
Treasury bills maturing in one year	3500000
Cash and cash equivalents	4600000

Question 2

Cash in bank- demand deposit	5000000
Cash on hand	400000
Postage stamps (Petty cash)	5000
Money order	50000
Manager check	100000
Traveler check	1000000
Postdated customer check	500000
Cash and Cash equivalents	7055000