TAEHYUNG Company reported a total cash and cash equivalent of P6,500,000 on December 31, 2019, which includes the following information: Two certificates of deposit, each totaling P600,000. These certificates of deposit have a maturity of 120 days A check that is dated January 12, 2020 in the amount of P150,000 A commercial paper of P2,500,000 which is due in 120 days Currency and coins on hand amounted to P10,500 TAEHYUNG Company has agreed to maintain a cash balance of P500,000 in one of its banks at all times and it is not available for withdrawal and to ensure future credit availability (this amount was included in the above balance). How much is the correct amount of cash and cash equivalents that TAEHYUNG Company should report in its December 31, 2019 statement of financial position?

Cash and Cash equivalent are the most liquid asset of the company which is used to repay the short…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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TAEHYUNG Company reported a total cash and cash equivalent of P6,500,000 on December 31, 2019, which includes the following information:

Two certificates of deposit, each totaling P600,000. These certificates of deposit have a maturity of 120 days
A check that is dated January 12, 2020 in the amount of P150,000
A commercial paper of P2,500,000 which is due in 120 days
Currency and coins on hand amounted to P10,500

TAEHYUNG Company has agreed to maintain a cash balance of P500,000 in one of its banks at all times and it is not available for withdrawal and to ensure future credit availability (this amount was included in the above balance).

How much is the correct amount of cash and cash equivalents that TAEHYUNG Company should report in its December 31, 2019 statement of financial position?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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