Currency and coin in safe – $5,500
Funds in savings account
(requires $3,000 compensating balance) 15,250
Funds in checking account 1,750
Traveler’s checks 1500
Postdated check 2,250
Not-sufficient-funds check 450
Money market fund 12,600
Identify the amount of the above items that should be reported as cash and cash equivalents on Jenkins Company’s balance sheet.
Answer: cash and cash equivalents = $ 36,300
Working notes for the above answer is as under
| cash and cash equivalents | Amount in $ |
| Currency and coin in safe | 5500 |
| Funds in savings account | 15250 |
| Funds in checking account | 1750 |
| Traveler’s checks | 1500 |
| Postdated check | 2250 |
| Not-sufficient-funds check | 450 |
| Money market fund | 12600 |
| Total | 39300 |
| Less | |
| requires for compensating balance |
3000 |
| cash and cash equivalents | 36300 |
Explanation to the answer :
You need to add currency and coins in safe, funds in saving account, funds in checking account, travelers check, and money market fund. Once you get that total, subtract the 3,000 from it
