Louela Company showed the following unadjusted cash balances at December 31, 2003: Undeposited coin and currency – cash on hand 500,000 Cash in bank – current account 6,000,000 Company checks written and deducted from the current account but not scheduled to be mailed until January 2, 2004 1,000,000 Time deposits restricted for use (expected use in 2004) 2,000,000 Louela Company's bank statement for the month of December included the following information: Bank Service charge for December 20,000 Check deposited by Louela during December was not collectible and has been marked "NSF" by the bank and returned 100,000 In comparing the bank statement to its own cash records, Louela found: Deposits made but not yet recorded by the bank 2,500,000 Checks written and mailed but not yet recorded by the bank 1,300,000 All the deposits in transit and outstanding checks have been properly recorded in Louela's books. Louela also found a check for P200,000, payable to Louela, that had not yet been deposited and had not been recorded in Louela's books. Louela agreed to maintain a minimum balance of P50,000 in its unrestricted current account in exchange for a guaranteed line of credit. How much should Louela report as "cash and cash equivalents" at its December 31, 2003 balance sheet?
Louela Company showed the following unadjusted cash balances at December 31, 2003: Undeposited coin and currency – cash on hand 500,000 Cash in bank – current account 6,000,000 Company checks written and deducted from the current account but not scheduled to be mailed until January 2, 2004 1,000,000 Time deposits restricted for use (expected use in 2004) 2,000,000 Louela Company's bank statement for the month of December included the following information: Bank Service charge for December 20,000 Check deposited by Louela during December was not collectible and has been marked "NSF" by the bank and returned 100,000 In comparing the bank statement to its own cash records, Louela found: Deposits made but not yet recorded by the bank 2,500,000 Checks written and mailed but not yet recorded by the bank 1,300,000 All the deposits in transit and outstanding checks have been properly recorded in Louela's books. Louela also found a check for P200,000, payable to Louela, that had not yet been deposited and had not been recorded in Louela's books. Louela agreed to maintain a minimum balance of P50,000 in its unrestricted current account in exchange for a guaranteed line of credit. How much should Louela report as "cash and cash equivalents" at its December 31, 2003 balance sheet?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Louela Company showed the following unadjusted cash balances at December 31, 2003:
Undeposited coin and currency – cash on hand
500,000
Cash in bank – current account
6,000,000
Company checks written and deducted from the current account
but not scheduled to be mailed until January 2, 2004
1,000,000
Time deposits restricted for use (expected use in 2004)
2,000,000
Louela Company's bank statement for the month of December included the following
information:
Bank Service charge for December
20,000
Check deposited by Louela during December was not collectible
and has been marked "NSF" by the bank and returned
100,000
In comparing the bank statement to its own cash records, Louela found:
Deposits made but not yet recorded by the bank
2,500,000
Checks written and mailed but not yet recorded by the bank 1,300,000
All the deposits in transit and outstanding checks have been properly recorded in Louela's
books. Louela also found a check for P200,000, payable to Louela, that had not yet been
deposited and had not been recorded in Louela's books. Louela agreed to maintain a
minimum balance of P50,000 in its unrestricted current account in exchange for a guaranteed
line of credit. How much should Louela report as "cash and cash equivalents" at its December
31, 2003 balance sheet?
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