A new accountant at Sage Hill Inc. is trying to identify which of the amounts sh

Question

A new accountant at Sage Hill Inc. is trying to identify which of the amounts shown below should be reported as the current asset “Cash and cash equivalents” in the year-end balance sheet, as of April 30, 2017.

(a) What balance should Sage Hill report as its “Cash and cash equivalents” balance at April 30, 2017?

1. $80 of currency and coin in a locked box used for incidental cash transactions. 2. A $11,600 U.S. Treasury bill, due May 31, 2017. 3. $325 of April-dated checks that Sage Hill has received from customers but not yet deposited. 4. An $80 check received from a customer in payment of its April account, but postdated to May 1. 5. $4,320 in the company’s checking account. 6. $7,070 in its savings account. 7. $52 of prepaid postage in its postage meter. 8. A $50 IOU from the company receptionist.

Explanation / Answer

Cash and Cash Equivalents:

Currency $80 U.S. Treasury bill $11,600 April checks $325 Checking account $4,320 Savings account $7,070 Total $23,395

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