As at December 31, 2018, Vermont Maple Inc. has the following balances: Cash in
ID: 2409255 • Letter: A
Question
As at December 31, 2018, Vermont Maple Inc. has the following balances:
Cash in bank
$108,000
Investment in preferred shares (retractable, purchased by Vermont Maple within 90 days of maturity date)
120,000
Investment in common shares (to be sold within 30 days)
90,000
Cash (legally restricted for an upcoming long-term debt retirement)
245,000
Required:
1. Determine the December 31, 2018 cash and cash equivalents amount for the 2018 statement of cash flows under
a. IFRS
b. ASPE
Cash in bank
$108,000
Investment in preferred shares (retractable, purchased by Vermont Maple within 90 days of maturity date)
120,000
Investment in common shares (to be sold within 30 days)
90,000
Cash (legally restricted for an upcoming long-term debt retirement)
245,000
Explanation / Answer
a. Cash and cash equivalent as per IFRS:
Cash in bank + Investment in common shares = $ 108000+90000 = $ 198000
as per IFRS Restricted cash equivalent is to be shown in the balance sheet as a note to the financial statement.
b. As per ASEP
108000+90000+245000 = $ 443000 (here restricted cash balance is also considered)
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