Hamilton Company has cash in bank of $10,000, restricted cash in a separate account of $3,000, and a bank overdraft in an account at another bank of $1,000.Hamilton should report cash of

Question

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Hamilton Company should report the cash in bank ($10,000), but should also report the bank overdraft ($1,000) as a liability rather than a decrease in cash. The restricted cash should also be disclosed separately, but it is still considered part of the overall cash balance. Therefore, the total cash reported should be $10,000-$1,000+$3,000 = $12,000, but only the cash in bank is considered as "cash" for financial reporting purposes.

Hamilton Company Has Cash in Bank of $10,000, Restricted Cash