Boyer International is currently preparing its financial statements for 2017. Th

Question

Boyer International is currently preparing its financial statements for 2017. The company has several differ- ent sources of cash and is trying to decide how to classify them. The sources of cash follow: a. $30,000 in a checking account with The First National Bank. b. $3,000 in checks dated December 4, 2017, received from customers c. $250,000 in certificates of deposit through The First National Bank, which are to mature on November 15, 2020. $40,000 in a savings account with The First National Bank. $1,000 in the petty cash fund. As of December 31, 2017, there are receipts totaling $600 in the petty cash drawer. $50,000 held as a compensating balance for a loan with The First National Bank. The loan agreement requires Boyer International to maintain a compensating balance equal to 10 percent of the loan balance. During 2018, the outstanding principal balance will be reduced to $350,000. d. e. f. g. $8,000 in a checking account with Interstate Federal Savings Indicate how each source listed should be classified on the December 31, 2017, balance sheet.Explain each answe

Explanation / Answer

A) The account balance of $30,000 is asset for the company , so it should be shown under curremt asset as cash in bank.

B) since the check is dated before year end , the balance of $3,000 should be credited to bank and add the total balance by 3,000.

C) firstly the matured deposit should be removed from accounts and the remaining balance should only be accounted in balancesheet .

D) Balance on savings account should be treat as a current asset and should shown as cash in bank .

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