Answered: cash balances:

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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Question

On December 31, 2019, Taehyung Company had the following cash balances:

Cash in bank- P2,500,000

Petty Cash fund (all funds were reimbursed on 12/31/2019)- P150,000

Time deposit (start date: December 1, 2019 and due February 14, 2020)- P350,000

Cash in bank included P900,000 of compensating balance against short-term borrowing arrangement on December 31, 2019. The compensating balance is legally restricted as to withdrawal.

In the December 31, 2019, statement of financial position, what total amount should be reported as cash and cash equivalents?

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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