A company had the following balances in various cash accounts on its balance sheet Checking account balance Savings account balance Petty cash fund S12,300 34,500 1200 What amount should be reported as cash under the current assets section of the company's balance sheet? O B) $13,500 O C) S46,800 O D) S48,000 Show transcribed image text A company had the following balances in various cash accounts on its balance sheet Checking account balance Savings account balance Petty cash fund S12,300 34,500 1200 What amount should be reported as cash under the current assets section of the company's balance sheet? O B) $13,500 O C) S46,800 O D) S48,000
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The controller of the Red Wing Corporation is in the process ofpreparing the companyâs 2013 financial statements. She is trying todetermine the correct balance of cash and cash equivalents to bereported as a current asset in the balance sheet. The followingitems are being considered: |
a. | Balances in the companyâsaccounts at the First National Bank; checking $14,800, savings$23,400. |
b. | Undeposited customer checks of$6,500. |
c. | Currency and coins on hand of$710. |
d. | Savings account at the East Bay Bank with a balance of $530,000.This account is being used to accumulate cash for future plantexpansion (in 2015). |
e. | $23,000 in a checking account at the East Bay Bank. The balancein the account represents a 10% compensating balance for a $230,000loan with the bank. Red Wing may not withdraw the funds until theloan is due in 2016. |
f. | U.S. Treasury bills; 2-monthmaturity bills totaling $28,000, and 7-month bills totaling$33,000. |
Required: |
1. | Determine the correct balance of cash and cash equivalents to bereported in the current asset section of the 2013 balancesheet. |
____ 11. Which one of the following statements is incorrect?
a. | The accounting function should be separated from the custodianship of a company's assets. |
b. | Certain clerical personnel in a company should be rotated among various jobs. |
c. | The responsibility of receiving merchandise and paying for it usually should be given to one person. |
d. | A company's personnel should given well-defined responsibilities. |
____ 12. Which of the following is incorrect?
a. | The operating cycle always is one year in duration. |
b. | The operating cycle sometimes is longer than one year in duration. |
c. | The operating cycle sometimes is shorter than one year in duration. |
d. | The operating cycle is a concept applicable both to manufacturing and retailing enterprises. |
____ 13. When the allowance method of recognizing bad debt expense is used, the entry to record the write-off of a specific uncollectible account would decrease
a. | allowance for doubtful accounts. |
b. | net income. |
c. | net realizable value of accounts receivable. |
d. | working capital. |
____ 14. On January 1, 2014, Kyle Corporation established a petty cash fund of $400. On December 31, 2014, the petty cash fund was examined and found to have receipts and documents for miscellaneous expenses amounting to $364. In addition, there was cash amounting to $44. What entry would be required to record replenishment of the petty cash fund on December 31, 2014?
a. | Petty Cash.................... 364 Cash Short and Over......... 8 Cash........................ 356 |
b. | Miscellaneous Expense......... 364 Cash Short and Over......... 8 Petty Cash.................. 356 |
c. | Miscellaneous Expense......... 364 Cash Short and Over......... 8 Cash........................ 356 |
d. | Miscellaneous Expense......... 356 Cash Short and Over......... 8 Cash........................ 364 |
____ 15. In preparing a bank reconciliation, interest paid by the bank on the account is
a. | added to the bank balance. |
b. | subtracted from the bank balance. |
c. | added to the book balance. |
d. | subtracted from the book balance. |
1- Hill Company established a petty cash fund of? $500. Thefirst transaction was the purchase of stamps for? $46. Which of thefollowing statements is? CORRECT?
A.
The amount of cash on hand and the cash voucher should bemaintained in a cash box or other secure device.
B.
The amount of cash on hand should equal? $454.
C.
The petty cash custodian prepares a petty cash voucher to listthe item purchased.
D.
All of the statements are correct.
2-In a bank? reconciliation, a NSF check? is:
A.
added to the bank balance.
B.
added to the book balance.
C.
subtracted from the book balance.
D.
subtracted from the bank balance.
3-The following accounts and balances are taken from Moore?Company's adjusted trial? balance:
Accounts Payable | ?$12,000 |
Accounts Receivable | 2900 |
Accumulated Depreciation | 1500 |
Depreciation Expense | 1100 |
Dividends | 2400 |
Insurance Expense | 2600 |
Interest Revenue | 1140 |
Prepaid Insurance | 2020 |
Retained Earnings | ?10,600 |
Salary Expense | ?22,100 |
Service Revenue | ?37,800 |
What is the ending balance in Retained Earnings after theclosing entries are? completed?
A.
?$10,740
B.
?$21,340
C.
?$38,940
D.
?$13,140