Wynn Company has recorded the following items in its financial records. Cash in bank ..........................................$ 42,000 Cash

Question:

Wynn Company has recorded the following items in its financial records.

Cash in bank ..........................................$ 42,000

Cash in plant expansion fund ............. 100,000

Cash on hand .......................................... 12,000

Highly liquid investments ...................... 34,000

Petty cash ..................................................... 500

Receivables from customers ................ 89,000

Stock investments .................................. 61,000

The highly liquid investments had maturities of 3 months or less when they were purchased. The stock investments will be sold in the next 6 to 12 months. The plant expansion project will begin in 3 years.


Instructions

(a) What amount should Wynn report as “Cash and cash equivalents” on its balance sheet?

(b) Where should the items not included in part (a) be reported on the balance sheet?

(c) What disclosures should Wynn make in its financial statements concerning “cash and cash equivalents”?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Accounting Principles

ISBN: 9781118566671

11th Edition

Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso

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