Answered: Cash in banks $1,300,000 Petty cash…

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

Greenfield Company had the following cash balances at December 31, 2019:

Cash in banks includes $300,000 of compensating balances against short-
term borrowing arrangements at December 31, 2019. The compensating
balances are not legally restricted as to withdrawal by Greenfield. In the
current assets section of Green-field's December 31, 2019, balance sheet,
what total amount should be reported as cash?
a. $1,020,000
b. $1,320,000
c. $3,020,000
d. $3,320,000

Cash in banks
$1,300,000
Petty cash funds (all funds were
reimbursed on December 31, 2019)
Cash legally restricted for additions to
plant (expected to be disbursed in
2021)
20,000
2,000,000

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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