Sunil's Supplies has hired a new junior accountant and has given her the task of identifying what should be reported as cash as at February 28, 2017, on the company's balance sheet. The following information is available.
1. Cash on hand in the cash registers on February 28 totals $2,339. Of this amount, $250 is kept on hand as a cash float.
2. The balance in the petty cash fund is $275. Actual petty cash on hand at February 28 is $69. Receipts total $206.
3. The balance in the bank chequing account at February 28 is $7,460.
4. The company has two short-term investments: (1) $5,000 in a 60-day treasury bill, and (2) $3,000 in a six month term deposit.
5. The company has as taledated cheque for $840 from a customer for the purchase of merchandise. The customer made a mistake on the date of the cheque and the company's bank wouldn't let it deposit the cheque. The customer has promised to fix the cheque on March 2.
6. The company has a U.S. dollar bank account. At February28, its U.S. funds were worth the equivalent of $8,555 Canadian.
7. The company received $10,500 of cash on February 28 as an advance deposit in trust on a property sale.
8. In order to hook up utilities, the company is required to deposit $500 in trust with Ontario Hydro. This amount must remain on deposit until a satisfactory credit history has been established. The company expects to have this deposit back within the year.
Instructions
(a) Calculate the amount of cash and cash equivalents that should be reported on the year-end balance sheet as a current asset.
(b) Identify where any items that were not reported in the balance for cash in part (a) should be reported.
Taking It Further
Under certain circumstances, cash may have to be presented as non-current. Why is this important information for users of the financial statements?