Question

Logistics Company had the following items listed in its trial balance at 12/31/19: Balance in checking account, Bank of the East $ 442,000 Treasury Bills, purchased on 11/1/19, mature on 1/30/20 20,000 Loan Payable, long-term, Bank of the East $300,000 Included in the checking account balance is $50,000 of restricted cash that Bank of the East requires as a compensating balance for the $300,000 note. What amount will Logistics include in its year-end balance sheet as cash and cash equivalents?

Answer 1

Answer:

$412,000

Explanation:

Given that,

Bank of the East = $442,000

Treasury Bills = $20,000

Restricted cash = $50,000

Loan Payable included in the checking account = $300,000

Therefore,

Logistics include in its year-end balance sheet as cash and cash equivalents:

= Bank of the East - Restricted cash + Treasury Bills

= $442,000 - $50,000 + $20,000

= $412,000