Logistics Company had the following items listed in its trial balance at 12/31/2018: $\begin{array}{lr}
\text { Balance in checking account, Bank of the East }&\$442,000\
\text {Treasury bills, purchased on 11/1/2018, }&\
\text {mature on 1/30/2019 }&20,000\
\text {Loan payable, long-term, Bank of the East }&300,000\
\end{array}$
Included in the checking account balance is $50,000 of restricted cash that Bank of the East requires as a compensating balance for the $300,000 note. What amount will Logistics include in its year-end balance sheet as cash and cash equivalents?

Question

Logistics Company had the following items listed in its trial balance at 12/31/2018: $\begin{array}{lr}
\text { Balance in checking account, Bank of the East }&\$442,000\
\text {Treasury bills, purchased on 11/1/2018, }&\
\text {mature on 1/30/2019 }&20,000\
\text {Loan payable, long-term, Bank of the East }&300,000\
\end{array}$
 Included in the checking account balance is $50,000 of restricted cash that Bank of the East requires as a compensating balance for the $300,000 note. What amount will Logistics include in its year-end balance sheet as cash and cash equivalents?

Quizplus · Accepted Answer

$442,000 - 50,000 + 20,000 = $412,000

Logistics Company Had the Following Items Listed in Its Trial