A new accountant at Larkspur, Inc. is trying to identify which of the amounts shown below should be reported as the current asset “Cash and cash equivalents” in the year-end balance sheet, as of April 30, 2022.

1. $52 of currency and coin in a locked box used for incidental cash transactions.
2. A $10,200 U.S. Treasury bill, due May 31, 2022.
3. $255 of April-dated checks that Larkspur has received from customers but not yet deposited.
4. An $78 check received from a customer in payment of its April account, but postdated to May 1.
5. $3,360 in the company’s checking account.
6. $6,350 in its savings account.
7. $52 of prepaid postage in its postage meter.
8. A $22 IOU from the company receptionist.

(a) What balance should Larkspur report as its “Cash and cash equivalents” balance at April 30, 2022?

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jafransp jafransp · Answer 1 · 2019-11-06T10:04:16+01:00

Answer:

Cash and cash equivalents = $20,217

Explanation:

Larkspur Company

Cash and Cash Equivalent

Transaction No. Particulars $

1. Petty Cash Fund 52

2. Treasury Bill 10,200

3. Deposit-In-Transit 255

Cash-in-Bank:

5. Checking account 3,360

6. Savings account 6,350

Total Cash & Cash Equivalent 20,217

Transaction #4. Since it did not post during April, therefore, it could not be a cash item.

Transaction #7. It is an expense.

Transaction #8. IOU is a receivable.

abiolataiwo2015 abiolataiwo2015 · Answer 2 · 2022-03-24T12:50:59+01:00

The balance should Larkspur report as its “Cash and cash equivalents” balance at April 30, 2022 is $20,217.

April 30, 2022

Petty Cash Fund $52

Treasury Bill $10,200

Deposit-In-Transit $255

Checking account $3,360

Savings account $6,350

Cash & Cash Equivalent $20,217

Inconclusion the balance should Larkspur report as its “Cash and cash equivalents” balance at April 30, 2022 is $20,217.

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