PetroChina reported the following information in a recent annual report. Cash and Cash Equivalents. Cash and cash
Question:
PetroChina reported the following information in a recent annual report.
Notes Receivable. Notes receivable represents mainly bills of acceptance issued by banks for the sale of goods and products. All notes receivable of the Group are due within one year.
Instructions
a. What items other than coin and currency may be included in "cash"?
b. What items may be included in "cash equivalents"?
c. What are compensating balance arrangements, and how should they be reported in financial statements?
d. What are the possible differences between cash equivalents and short-term (temporary) investments?
e. Assume that PetroChina has an agreement to transfer receivables to various banks. If the sale agreement meets the criteria for sale accounting, cash proceeds were RMB345 million, the carrying value of the receivables sold was RMB360 million, and the fair value of the recourse obligation was RMB15 million, what was the effect on income from the sale of receivables?
f. Briefly discuss the impact of the transaction in (e) on PetroChina's liquidity.
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Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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