47.ABC Corp had a cash balance of P500,000 in its books at Dec 31. The following are additional information for the entity: Cash in BDO, P200,000 (compensating balance of P50,000 is legally restricted) Cash in BPI, (P2,000) deducted from the balance Cash on hand, P10,000 (includes post dated check of P6,000) Petty Cash Fund, P5,000 (includes petty cash voucher of P1,500) How would the compensating balance be shown in the financial statements at Dec 31? Deduction from cash balance Shown as other asset and a disclosure on the nature of the restriction Notes to financial statements only Shown as current liability
47.ABC Corp had a cash balance of P500,000 in its books at Dec 31. The following are additional information for the entity: Cash in BDO, P200,000 (compensating balance of P50,000 is legally restricted) Cash in BPI, (P2,000) deducted from the balance Cash on hand, P10,000 (includes post dated check of P6,000) Petty Cash Fund, P5,000 (includes petty cash voucher of P1,500) How would the compensating balance be shown in the financial statements at Dec 31? Deduction from cash balance Shown as other asset and a disclosure on the nature of the restriction Notes to financial statements only Shown as current liability
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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47.ABC Corp had a cash balance of P500,000 in its books at Dec 31. The following are additional information for the entity: Cash in BDO, P200,000 (compensating balance of P50,000 is legally restricted) Cash in BPI, (P2,000) deducted from the balance Cash on hand, P10,000 (includes post dated check of P6,000) Petty Cash Fund, P5,000 (includes petty cash voucher of P1,500) How would the compensating balance be shown in the financial statements at Dec 31?
Deduction from cash balance
Shown as other asset and a disclosure on the nature of the restriction
Notes to financial statements only
Shown as current liability
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