Cash and Cash Equivalents E7.1 (LO 2) Excel (Determining Cash Balance) The controll Fashion Co. is trying to determine the amount of cash to report on December 31, 2020 statement of financial position. The following information is provided: 1. A commercial savings account with $600,000 and a commercial chequing account balance of $900,000 are he First National Bank. There is also a bank overdraft of $35, in a chequing account at the Royal Scotia Bank. No other accounts are held at the Royal Scotia Bank. 2. Fashion has agreed to maintain a cash balance of $100,00 all times in its chequing account at First National Bank to ensure that credit is available in the future. 3. Fashion has a $5-million investment in a Commercial Bar Montreal money-market mutual fund. This fund has cheq account privileges. 4. There are travel advances of $18,000 for executive travel : the first quarter of next year. (Employees will complete expense reports after they travel.) 5. A separate cash fund in the amount of $1.5 million is resti for the retirement of long-term debt. 6. There is a petty cash fund of $3,000. 7. A $1,900 IOU from Marianne Koch, a company officer, wi withheld from her salary in January 2021. 8. There are 20 cash floats for retail operation cash registers $475, and 12 at $600. 9. The company has two certificates of deposit, each for $500,000. These certificates of deposit each had a maturit 120 days when they were acquired. One was purchased on October 15 and the other on December 27. 10. Fashion has received a cheque dated January 12, 2021, ir amount of $25,000 from a customer owing funds at Decer 31. It has also received a cheque dated January 8, 2021, in amount of $11,500 from a customer as an advance on an c that was placed on December 29 and will be delivered Feb 1, 2021. 11. Fashion holds $2.1 million of commercial paper of Rocco Leone Co., which is due in 60 days. 12. Currency and coin on hand amounted to $7,700. 12 Fachinn ananirad i Ann charge of Cartel far to an nar che
13. Fashion acquired 1,000 shares of Sortel for $3.90 per sha late November and is holding them for trading. The share: still on hand at year end and have a fair value of $4.10 per share on December 31, 2020. Instructions a. Calculate the amount of cash to be reported on Fashion's at December 31, 2020. b. Show the proper way to report items that are not reporter cash on the December 31, 2020 SFP. c. Referring to item 2 above, why would First National Bank require Fashion to maintain a cash balance of $100,000 at a times in its chequing account? d. Digging Deeper From the perspective of a potential lender tc Fashion, discuss the importance of proper reporting of item
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