Cash & Cash Equivalents Introduction: Cash & cash equivalents may constitute a significant proportion of the total assets of an entity. It is the most liquid asset found within the asset category of a company ’s balance sheet. It is an important criterion to evaluate the liquidity and the short term solvency of a business venture. Liquidity and short term solvency means the ability of the business to pay its short term liabilities. Inability to pay-off short term liabilities affects its credibility
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Cash and Cash Equivalents Cash This includes money and other negotiable instrument that is payable in money and acceptable by the bank for deposit and immediate credit. Examples are bills and coins‚ checks‚ bank drafts and money orders. To be included or considered as cash‚ it must be unrestricted as to use‚ meaning‚ it must be readily available for use or payment of current obligations‚ thus‚ not subject to contractual or legal restrictions. The following items are included in “cash”:
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Practical Accounting 1 Cash and Receivables -1. Assume the following facts for Kurt Company: the month-end bank statement shows a balance of P40‚000: outstanding checks totaled P2‚000; a deposit of P8‚000 is in transit at month-end; and a check for Pf400 was erroneously charged against the account by the bank. What is the correct cash balance at the end of the month? a. P33‚600 c. P45‚600 b. P34‚400 d. P46‚400 2. The August 31 bank statement of K‚ Inc. showed a balance of P113‚000. Deduction in
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Case Chapter 7 Cash and Receivables 1. Petty Cash (10 min.) The petty cash fund of $200 for Walsh Company appeared as follows on December 31‚ 2008: Cash $93.60 Petty cash vouchers Freight in $21.40 Postage 40.00 Balloons for a special occasion 18.00 Meals 25.00 Instructions 1. Prepare the journal entries required to establish the petty cash fund. 2. Prepare in general journal form the entry to replenish the fund. 3. On December 31‚ the office manager gives instructions
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Intangible assets Current assets on a balance sheet have components that include cash and cash equivalents‚ accounts receivable‚ and inventories. These usually can be converted into cash quicker than that of other assets because they are for near term uses. Cash equivalents are the funds invested in short term securities such as T-Bills. Accounts receivable are the owed funds to the specific company by its customers. Inventories are usually found in manufacturing businesses which include raw materials and
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The Cash Flow statement shown above provides a summary of the outflows and inflows of cash as well as the cash equivalents of American Eagle for the Fiscal period 2013 to 2017 and of its main competitor‚ Abercrombie and Fitch. For the period 2013‚ American Eagle presents a net income above the $2‚000. Nonetheless‚ for the fiscal 2013 to the Fiscal 2014‚ the company went down from a 6.7% to a 2.5%‚ respectably. This evident decline in the AEO’s net income was due to the decrease in sales the firm
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beginning of the current season‚ the ledger of Hafner’s Tennis Shop showed Cash $2‚500‚ Merchandise Inventory $1‚700‚ and J. Hafner‚ Capital $4‚200. The following transactions were completed during April. (a) General Journal J1 |Date | |Account Titles and Explanation | |Ref. | |Debit | |Credit | |Apr. 4 | |Merchandise Inventory | |120 | |
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unknown amount: a. During October‚ Shandra Company had $97‚500 of cash receipts and $101‚250 of cash disbursements. The October 31 Cash balance was $16‚800. Determine how much cash the company had at the close of business on September 30. b. On September 30‚ Li Ming Co. had a $97‚500 balance in Accounts Receivable. During October‚ the company collected $88‚950 from its credit customers. The October 31 balance in Accounts Receivable was $100‚500. Determine the amount of sales on account that occurred
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area. INVENTORY AND CASH MANAGEMENT SESSION 5 T Cash Can Be Managed as Inventory • Cash managed like inventory in manufacturing o Doesn’t mean physical cash; instead can be ‘quick’ financial instruments:短期国库券 checking accounts t-bills‚ o Demand for cash by organizations‚ individuals varies • Main concepts are: o Need to estimate ‘transactions demand’ o Models for changes in cash balances o Continuous cash management approach • Supply chain of physical cash o Think
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Foundation University Masters in Business Administration MBA 06a Managerial Accounting Report on Factory Overhead: Actual‚ Planned and Applied Submitted to: Engr. Marlon Tanilon Submitted by: Hazel R. Tanilon 04 February 2012 Factory Overhead • Defined as indirect material‚ indirect labor and other that cannot be conveniently identified with or charged
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