a. 273,500 b. 249,500 c. 261,500 d.

264,500

18.-19.(2 points) While checking the cash accounts of Denmark Company on December 31,2006, you find the following
information:
Balance per book 6,5000,000
Balance in checking account(outstanding checks per
Book of 1,660,000) 7,000,000
Deposit in bank closed by BSP 1,500,000
Deposit in transit 1,200,000
Currency and coins on hand 400,000
Petty cash fund(of which 10,000 is in form of paid vouchers) 50,000
Bank charges not yet taken up in the book 10,000
Bond sinking fund cash 1,000,000
Receivables from employees 100,000
Error in recording a check in the book. The correct
Amount as paid by the bank is 100,000 instead of
150,000 as recorded in the book, or a difference of 50,000

The correct cash in bank balance for Denmark on December 31,2006 is a. 6,540,000
d. 8040,000

20. Bank statements provide information about all of the following except
a. Checks cleared during the period
b. NSF checks
c. Bank charges for the period
d. Errors made by the depositor

21. The cash account in the current asset section of the balance sheet for Heater Company showed a balance of 555,000. It was found to
include the following items:
Petty cash fund(1,000 is in the form of paid vouchers) 5,000
Checking account balance, per bank statement
( A 25,000 check is still outstanding) 255,000
Undeposited receipts, including a post datedCheck for 5,000 120,000
Currencies and coins awaiting deposit 55,000
Bond sinking fund-cash 100,000
Check drawn by manager, returned by bank marked NSF 20,000
What is the correct cash balance for Heater Company’s balance sheet? a. 404,000

22. The cash account in the current asset section of the December 31,2006 balance sheet of
King Company consists of :
 Cash in banks 2,250,000
Cash restricted for additions to plant(expected to be
Disbursed in 2008) 3,000,000
Petty cash funds(all funds were replenished on
December 31,2006) 30,000
Included in the cash in banks is a compensating balance of 750,000 against short term borrowing arrangements at December 31,2006.
The compensating balance is not legally limited as to withdrawal by King Company.
What is the correct cash balance of King Company at December 31,2006? a. 2,280,000

23.Western Company reported a total cash and cash equivalent of 6,325,000 on December 31,2006, which includes the following
information:
a. two certificates of deposits, each totaling 500,000. These certificates of deposit have a maturity of 120 days.
b. A check that is dated January 12,2007 in the amount of 125,000.
c. A commercial paper of 2,100,000 which is due in 120 days.
d. Currency and coins on hand amounted to 7,700.
Western Company has agreed to maintain a cash balance of 500,000 in one of its banks at all times to ensure future credit
availability( this amount was included in the above balance)
How much is the correct amount of cash and cash equivalents that Western Company should report in its December 31,2006 balance
sheet?a. 2,600,000