A new accountant at La Maison Inc. is trying to identify which of the following amounts should
Question:
A new accountant at La Maison Inc. is trying to identify which of the following amounts should be reported as the current asset “Cash and cash equivalents” in the yearend balance sheet, as of April 30, 2007. 1. $60 of currency and coin in a locked box used for incidental cash transactions. 2. A $10,000 U.S. Treasury bill, due May 31, 2007. 3. $300 of April-dated checks that La Maison has received from customers but not yet deposited. 4. An $85 check received from a customer in payment of its April account, but postdated to May 1.
5 . $2,500 in the company’s checking account. 6. $4,000 in its savings account. 7. $75 of prepaid postage in its postage meter.
8 . A $25 IOU from the company receptionist.
Instructions
(a) What balance should La Maison report as its “Cash and cash equivalents” balance at April 30, 2007?
(b) In what account(s) and in what financial statement(s) should the items not included in “Cash and cash equivalents” be reported?
Step by Step Answer:
Financial Accounting Tools For Business Decision Making
ISBN: 9780471730514
4th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso