Question

Gatti Corporation reported the following balances at June 30.   Accounts Payable $105   Accounts Receivable 95   Accumulated...

Gatti Corporation reported the following balances at June 30.
  Accounts Payable $105
  Accounts Receivable 95
  Accumulated Depreciation—Equipment 45
  Cash 15
  Cash Equivalents 20
  Common Stock 150
  Depreciation Expense 35
  Dividends 5
  Equipment 350
  Notes Payable (long-term) 110
  Notes Payable (short-term) 20
  Petty Cash 25
  Restricted Cash (short-term) 20
  Retained Earnings 50
  Salaries and Wages Expense 425
  Service Revenue 530
  Unearned Revenue 45
  Utilities Expense 65
Required:
1. What amount should be reported as “Cash and Cash Equivalents”?
2.

Prepare a classified balance sheet. Do not show the components that add up to your answer in requirement 1 but rather show only the line “Cash and Cash Equivalents.” (Amounts to be deducted should be indicated by a minus sign.)
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Homework Answers

Answer #1

1. Cash and cash equivalents = Cash + Cash equivalents + Petty cash + Restricted cash

= 15 + 20 + 25 + 20

= $80

2. Gatti Corporation

Balance Sheet

June 30

Assets $ Liabilities $
Current assets Current liabilities
Cash and cash equivalents 80 Notes payable 20
Account receivable 95 Accounts payable 105
Total current assets 175 Unearned revenue 45
Property, plant and equipment Total current liabilities 170
Equipment 350 Long term liabilities
Less: Accumulated depreciation -45 Notes payable 110
Property, plant and equipment, net 305 Total long term liabilities 110
Total liabilities 280
Stockholders Equity
Common stock 150
Retained earnings 50
Total stockholders equity 200
Total assets 480 Total liabilities and stockholders equity 480
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