Compensating balances represent Funds in a bank account that can't be spent Balances in a payroll checking account Accounts that are subject to bank service charges Accounts on which banks pay interest, e g , NOW accounts Cash that is restricted and not available for current operations is reported in the balance sheet as Equity Investments Liabilities A separate section between liabilities and equity Logistics Company had the following items listed in its trial balance at 12 31 2016 Balance in checking account, Bank of the East $442,000 Treasury bills, purchased on 11 1 2016 mature on 1 30 2017 20,000 Loan payable, long term, Bank of the East 300,000 Included in the checking account balance is $50,000 of restricted cash that Bank of the East requires as a compensating balance for the $300,000 note What amount will Logistics include in its year end balance sheet as cash and cash equivalents $412,000 $462,000 $392,000 $442,000 Wilson Company had the following cash balance items listed in its trial balance at 12 31 2016 Peterson Savings and Loan $50,000 Right Bank ( 5,000) Clinton County Trust Bank 10,000 If Wilson reports under IFRS, its 12 31 2016 balance sheet would show what cash balance ($5,000) $55,000 $60,000 None of these answer choices are correct On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2 10, n 30 Flores uses the gross method of accounting for cash discounts What is the correct entry for Flores on November 17, assuming the correct payment was received on that date Cash 7,840 Accounts receivable 7,840 Cash 7,840 Sales discounts 160 Accounts receivable 8,000 Cash 7,840 Sales 160 Accounts receivable 8,000 Cash 8,000 Sales discounts 160 Accounts receivable 8,000 Sales 160 On November 10 of the current year, Cherokee Industries sold materials to a customer for $8,000 with credit terms 2 10, n 30 Cherokee uses the net method of accounting for cash discounts What entry would Cherokee make on November 10 Accounts receivable 7,840 Sales 7,840 Accounts receivable 8,000 Sales 8,000 Accounts receivable 7,840 Cash discounts 160 Sales 8,000 Accounts receivable 8,000 Cash discounts 160 Sales 7,840

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 04, 2024

Compensating balances represent: Funds in a bank account that can't be spent. Balances in a payroll checking account. Accounts that are subject to bank service

Compensating balances represent:

Funds in a bank account that can't be spent.

Balances in a payroll checking account.

Accounts that are subject to bank service charges.

Accounts on which banks pay interest, e.g., NOW accounts.

/////////////////////////////////////////////////////////

Cash that is restricted and not available for current operations is reported in the balance sheet as:

Equity.

Investments.

Liabilities.

A separate section between liabilities and equity.

////////////////////////////////////////////////////////

Logistics Company had the following items listed in its trial balance at 12/31/2016:

Balance in checking account, Bank of the East	$442,000
Treasury bills, purchased on 11/1/2016 mature on 1/30/2017	20,000
Loan payable, long-term, Bank of the East	300,000

Included in the checking account balance is $50,000 of restricted cash that Bank of the East requires as a compensating balance for the $300,000 note. What amount will Logistics include in its year-end balance sheet as cash and cash equivalents?

$412,000.

$462,000.

$392,000.

$442,000.

////////////////////////////////////////////////////////

Wilson Company had the following cash balance items listed in its trial balance at 12/31/2016:

Peterson Savings and Loan:	$50,000
Right Bank:	( 5,000)
Clinton County Trust Bank:	10,000

If Wilson reports under IFRS, its 12/31/2016 balance sheet would show what cash balance?

($5,000).

$55,000.

$60,000.

None of these answer choices are correct.

////////////////////////////////////////////////////////////

On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. Flores uses the gross method of accounting for cash discounts. What is the correct entry for Flores on November 17, assuming the correct payment was received on that date?

Cash	7,840
Accounts receivable		7,840

Cash	7,840
Sales discounts	160
Accounts receivable		8,000

Cash	7,840
Sales	160
Accounts receivable		8,000

Cash	8,000
Sales discounts	160
Accounts receivable		8,000
Sales		160

/////////////////////////////////////////////////////////////////////////////////

On November 10 of the current year, Cherokee Industries sold materials to a customer for $8,000 with credit terms 2/10, n/30. Cherokee uses the net method of accounting for cash discounts. What entry would Cherokee make on November 10?