XERCISES 6.1 LO 6.1 Classification of Thems Excluded Computing the Cash Balance Listed below are tenisems that may be found on a balance Required: Indicate with yes or no whether cach of the items should be inclo ach of the items should be included in the cash balance presented on the band sheet. Also indicate the normal balance sheet treatment for those i s not included as a Include in Cash Hem Balance NSF checks Savings account Compensating balance Postdated checks IOUS Cash on hand Cash in sinking fund Travel advance Bank draft Prepaid debit card E6-2 LO 6.1 Reporting Cash on the Balance Sheet Your audit of Watt Corporation discovers the following information: Reconciled balance in First National Bank checking account $ 3,525.80 Reconciled balance in City National Bank checking account 140 201 Balance in First Federal savings account 34,291.00 Certificate of deposit 30,000.00 Employee's IOU 125.00 Employees' travel advances 1.640.00 Cash on hand fundeposited sales receipts) 1,232.10 Prepaid debit card 600.00 Customer's postdated check 290.40 Required: 1. What amount should be reported as cash on Watt's balance sheet? 2. Describe the balance sheet treatment of the items not included in the cash balance. Journal Entry to Separate Receivables An examination of Hutton Corporation's accounting records indicates that all receivables are being recorded in a single account entitled Receivables. An analysis of the account reveals the following: Accounts receivable (trade) $15,500 3,600 Accounts receivable officers 675 Interest receivable, due in 3 months 1,800 Advances to employees 9,000 Notes receivable (trade), due in 3 years 5,000 Deposit to guarantee contract performance 500 Utility deposit Total $36,075 E6-3 LO 6.3 Required: 1. Prepare a journal entry to separate the preceding items into their proper accounts. 2. How would each of the preceding items normally be reflected (current or noncurrent, trade or nontrade recel able) on Hutton's balance sheet