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ACC 110 Study Guide - Cash Flow, Accounts Receivable, Financial Statement

137 views21 pages
erinmosquito696
14 Apr 2011
School
Ryerson University
Department
Accounting
Course
ACC 110
Professor
Else Grech

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Document Summary

Cash, receivables, and the time value of money. E6-1. a. b. c. d. e. f. g. h. i. This item should be included in cash and cash equivalents because cash in the safe is readily available for use. This item should be included in cash and cash equivalents because it can be converted quickly and easily into a known amount of cash. This item could be categorized as a cash equivalent as it appears to represent a source of funds the company uses to help manage its cash. The unborrowed portion of the line isn"t included in cash and cash equivalents. Receivables aren"t included in cash and cash equivalents, whether they are current or non-current. Because the gic matures in 18 months it shouldn"t be classified as cash and cash equivalents. The gic might be convertible to cash at any time but the amount of cash it would realize would very depending on the time.

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Related Questions

Selected information (CAD millions) are presented for two firms ROP and DUL, operating in the same industries:

DUL

ROH

Net income

$ 4,529

$ 161

Net cash provided by operating activities

6,539

212

Net cash provided (used) by investing activities

(1,420)

35

Net cash provided (used) by financing activities

735

(176)

Net increase in cash and cash equivalents

$ 5,854

$ 71

Cash and cash equivalents, beginning of year

$ 2,078

$ 267

Cash and cash equivalents, end of year

$ 7,932

$ 338

Required:

i) Compare and discuss the performance / activity the two companies based on the above Cash Flow and Net Income information.

ii) Which company appears to be in a stronger Cash position? Why?

Argentine Company reported the following accounts on December 31, 2017:

cash on hand

1,000,000
Petty cash fund

50,000
Thrift Bank current account 2,000,000
PCB current account 1,500,000
PBB current account (overdraft) (200,000)
ABC treasury bill-120 days 3,000,000
DEF time deposit - 90days 2,000,000
Bond sinking fund 2,500,000

* The cash on hand included a customer postdated check of 150,000 and postal money order of 50,000.

* The petty cash fund included unreplenished petty cash vouchers for 10,000 and an employee check for 5,000 dated January 31, 2018.

* The DEF time deposit is set aside for acquisition of land to be made in early January 2018.

* The bond sinking fund is set aside for payment of bond payable due December 31,2018.

Required:

1. Prepare adjusting entries on December 31,2017.

2. Compute the total amount of cash and cash equivalents.

3. Explain the presentation of the items excluded from cash and cash equivalents.

Discuss cash and cash equivalents. How important arethe items that fall within this category to the successfuloperations of a company?