Question

Cash and Other Items

The following information has been extracted from Atwood Corporation's accounting records:

Cash on hand (undeposited sales receipts)		$ 1,535
Certificates of deposit		25,000
Customer's note receivable		1,000
Reconciled balance in University National Bank checking account		(350)
Reconciled balance in Second National Bank checking account		9,260
Balance in City Federal savings account		7,410
Customer's postdated check		980
Employee travel advances		1,200
Cash in bond sinking fund		8,300
Bond sinking fund investments		14,600

Required:

1. Determine the balance in Atwood's Cash account.
   $
2. Classify the balance sheet treatment for each item. If the item should be included in Cash, select "Cash" from the "Classification of Items" list. If not, select the correct choice to show how the item would be reported on the balance sheet.

   	Item	Included in Cash Balance		Classification of Items
   1.	Cash on hand (undeposited sales receipts)
   2.	Certificates of deposit
   3.	Customer's note receivable
   4.	Reconciled balance in University National Bank checking account
   5.	Reconciled balance in Second National Bank checking account
   6.	Balance in City Federal savings account
   7.	Customer's postdated check
   8.	Employee travel advances
   9.	Cash in bond sinking fund
   10.	Bond sinking fund investments

Answer 1

Answer :

S.No.	Item	Included in Cash Balance	Classification of Items
1	Cash on hand (undeposited sales receipts)	Yes	Cash
2	Certificates of deposit	No	Temporary Investment
3	Customer's note receivable	No	Notes Receivable
4	Reconciled balance in University National Bank checking account	Yes	Cash
5	Reconciled balance in Second National Bank checking account	Yes	Cash
6	Balance in City Federal savings account	Yes	Cash
7	Customer's postdated check	No	Accounts receivable
8	Employee travel advances	No	Prepaid expense
9	Cash in bond sinking fund	No	Long term investments
10	Bond sinking fund investments	No	Long term investments

Cash account = Cash on hand + Balance in University National Bank + Balance in Second National Bank + Balance in City Federal savings account

Cash account = $1,535 + ($350) + $9,260 + $7,410

= $17,855