On December 31, 2019, Albania Company provided the following data: Cash in bank 3,000,000 Time deposit- 30 days 1,000,000 Money market placement due on June 30, 2020              2,000,000 Saving deposit in closed bank 100,000 Sinking fund for bond payable due June 30,2021           1,500,000 Petty cash fund      20,000 The cash in bank included customer check of ?200,000 outstanding for 18 months

Subject:AccountingPrice:5.87 Bought7

Share With

On December 31, 2019, Albania Company provided the following data:

Cash in bank 3,000,000

Time deposit- 30 days 1,000,000

Money market placement due on June 30, 2020              2,000,000

Saving deposit in closed bank 100,000

Sinking fund for bond payable due June 30,2021           1,500,000

Petty cash fund      20,000

The cash in bank included customer check of ?200,000 outstanding for 18 months. (Stale check)

Check of ? 250,000 in payment of accounts payable was dated and recorded on December 31, 2019 but mailed to creditors on January 15, 2020.

Check of ? 100,000 dated January 31,2020 in payment of accounts payable was recorded and mailed December 31,2019.

(Post-dated creditor’s check)

The reporting period is the calendar year. The cash receipts journal was held open until January 15, 2020 during which time an amount of ? 450,000 was collected and recorded on December 31, 2019.

Required:

1. Prepare adjusting entries on December 31, 2019.

2. Compute the total amount of cash and cash equivalent that should be reported on December 31, 2019.

3. Explain the presentation of the items excluded from cash and cash equivalents.