Identify reporting of cash. (LO 6), AP Review cash management practices. (LO 7), C E7-12 A new accountant at Leftwich Inc. is trying to identify which of the amounts shown below should be reported as the current asset "Cash and cash equivalents" in the year-end balance sheet, as of April 30, 2014. 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, 2014. 3. $260 of April-dated checks that Leftwich 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. $4,800 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 Leftwich report as its "Cash and cash equivalents" balance at April 30, 2014? (b) In what account(s) and in what financial statement(s) should the items not included in "Cash and cash equivalents" be reported? E7-13 Canzer, Morel, and Wang, three law students who have joined together to open a law practice, are struggling to manage their cash flow. They haven't yet built up sufficient clientele and revenues to support their legal practice's ongoing costs. Initial costs, such as advertising, renovations to their premises, and the like, all result in outgoing cash flow at a time when little is coming in. Canzer, Morel, and Wang haven't had time to establish a bill- ing system since most of their clients' cases haven't yet reached the courts, and the lawyers didn't think it would be right to bill them until "results were achieved." Unfortunately, Canzer, Morel, and Wang's suppliers don't feel the same way. Their suppliers expect them to pay their accounts payable within a few days of receiving their bills. So far, there hasn't even been enough money to pay the three lawyers, and they are not sure how long they can keep practicing law without getting some money into their pockets