Q1) Controller for Clint Eastwood Co. is attempting to find out amount of cash to be reported on its December 31, 2007, balance sheet. Following information is provided.
1. Commercial savings account of $600.000 and commercial checking account balance of $900,000 are held at First National Bank of Yojimbo.
2. Money market fund account held at Volonte Co. (mutual fund organization) allows Eastwood to prepare checks on this balance, $5,000,000.
3. Travel advances of $180,000 for executive travel for first quarter of next year (employee to reimburse through salary reduction).
4. Separate cash fund in amount of $1,500,000 is restricted for the retirement of long-term debt.
5. Petty cash fund of $1,000.
6. I.O.U. from Marianne Koch, company customer, in amount of $190,000.
7. Bank overdraft of $110,000 has occurred at one of banks company uses to deposit its cash receipts. At present time, company has no deposits at this bank.
8. Company has two certificates of deposit, each totaling $500,000. These CDs have a maturity of 120 days.
9. Eastwood has got a check which is dated January 12, 2008, in amount of $125,000.
10. Eastwood has agreed to sustain a cash balance of $500,000 at all times at First national Bank of Yojimbo to make sure future credit availability.
11. Eastwood has bought $2,100,000 of commercial paper of Sergio Leone Co. which is due in 60 days.
12. Currency and coin on hand amounted to $7,700.
a) find out amount of cash to be reported on Eastwood Co.'s balance sheet at December 31, 2007.
b) Indicate proper reporting for items which are not reported as cash on the December 31, 2007, balance sheet.