Your browser does not support JavaScript!

Cash and Cash Equivalents

Cash and equivalents

Cash investment

1/1/X1, XYZ’s owner contributed cash of 100,000.

Dr/Cr

1/1/X1 | 1.1.X1    
Cash: Cash in bank

100,000

 
Paid-in Capital  

100,000


Cash loan

1/1/X1, XYZ received a 100,000 loan from a bank.

Dr/Cr

1/1/X1 | 1.1.X1    
Cash: Cash in bank

100,000

 
Loan  

100,000


Cash purchase and sale

1/1/X1, XYZ bought merchandise for 50,000. 1/2/X1, it sold it for 100,000.

Dr/Cr

1/1/X1 | 1.1.X1    
Merchandise

50,000

 
Cash: Cash in bank  

50,000


1/2/X1 | 2.1.X1    
Cash: Cash in bank

100,000

 
Revenue  

100,000

Cost of goods sold

50,000

 
Merchandise  

50,000


Cash equivalent

1/1/X1, XYZ acquired a 90-day certificate of deposit for 100,000. 3/31/X1, it received 100,496.

Implying an annual interest rate of 1.9988% = ((1 + 496 ÷ 100000)4) - 1

Dr/Cr

1/1/X1 | 1.1.X1    
Cash equivalents: Certificate of deposit

100,000

 
Cash: Cash in bank  

100,000


3/31/X1 | 31.3.X1    
Cash: Cash in bank

100,496

 
Cash equivalents: Certificate of deposit  

100,000

Interest revenue  

496


Security

1/1/X1 XYZ acquired a 90 day, 100,000 note for 99,506 and held it to maturity.

Implying an annual interest rate of 2.0006%.

Determined using Excel's =RATE function adjusted for quarterly periodicity: 2.0006% = ((1+RATE(1,-100000,99506,0,0,10%))^4) - 1

Dr/Cr

1/1/X1 | 1.1.X1    
Cash equivalents: Very short-term security

100,000

 
Cash equivalents: Deferred interest  

494

Cash: Cash in bank  

99,506


3/31/X1 | 31.3.X1    
Cash: Cash in bank

100,000

 
Cash equivalents: Very short-term security  

100,000

Cash equivalents: Deferred interest

494

 
Interest revenue  

494


Cash in transit

12/31/X1, XYZ withdrew 5,000 to replenish petty cash, paid rent of 250,000 and wages of 850,000 by bank transfer and received notice of an incoming 100,000 customer payment. Bank transfers cleared within 48 hours and the year-end bank balance was 2,000,000.

Reconciliation


XYZ Inc.
Bank reconciliation schedule
12/31/X1 | 31.12.X1
Cash in bank (per bank statement)

2,000,000

- Unrealized bank transfer (rent)

(250,000)

- Unrealized bank transfer (payroll)

(850,000)

+ Unrealized bank transfer (invoice sale)

100,000

Cash in bank (per balance sheet)

1,000,000

 

Same facts except, XYZ issued / received paper checks.

XYZ Inc.
Bank reconciliation table
12/31/X1 | 31.12.X1
Cash in bank (per bank statement)

2,000,000

- Check number 4568

(250,000)

- Checks number 4569 to4650

(850,000)

+ Check number 532458

100,000

Cash in bank (per balance sheet)

1,000,000

 

Same facts, except XYZ elected to journalize the cash in transit.

12/31/X1 | 31.12.X1    
Cash: Petty cash

5,000

 
Rent

250,000

 
Wages & salaries

850,000

 
Cash: Cash in transit (clearing account)

100,000

 
  Cash: Cash in bank  

5,000

  Cash: Cash in transit (clearing account)  

250,000

  Cash: Cash in transit (clearing account)  

850,000

  Receivables  

100,000


1/2/X2 | 2.1.X2    
Cash: Cash in transit (clearing account)

250,000

 
Cash: Cash in transit (clearing account)

850,000

 
Cash: Cash in bank

100,000

 
  Cash: Cash in bank  

250,000

  Cash: Cash in bank  

850,000

  Cash: Cash in transit (clearing account)  

100,000


Stamps and coupons

1/1/X1, XYZ purchased postage and revenue stamps with nominal values of 1,000 and 2,000 respectively. 1/2/X1, it mailed letters with postage of 100 and used revenue stamps to pay 200 in administrative fees.

Dr/Cr

1/1/X1 | 1.1.X1    
Cash equivalents: Postage stamps

1,000

 
  Cash: Petty cash  

1,000

Cash equivalents: Revenue stamps

2,000

 
  Cash: Petty cash  

2,000


1/2/X2 | 2.1.X2    
Postage

100

 
  Cash equivalents: Postage stamps  

100

Taxes and fees

200

 
  Cash equivalents: Revenue stamps  

200


Same fact except it purchased credit for a postage machine not stamps.

1/1/X1 | 1.1.X1    
Accruals: Pre-paid postage

1,000

 
  Cash: Petty cash  

1,000


1/2/X1 | 2.1.X1    
Postage

100

 
  Accruals: Accruals: Pre-paid postage  

100


Meal vouchers

1/1/X1, XYZ purchased employee meal vouchers with a nominal value of 60,000 for 60,600, paying the 1% fee to the issuer. 1/31/X1, it sold vouchers with a nominal value of 20,000 to its employees for 9,000.

Dr/Cr

1/1/X1 | 1.1.X1    
Cash equivalents: Vouchers

60,000

 
Pre-paid employee benefits: Food and beverage

600

 
  Cash in bank  

60,600


1/31/X / 31.1.X1    
Petty cash

9,000

 
Payroll: Fringe benefits: Food and beverage

11,200

 
  Cash equivalents: Vouchers  

20,000

  Pre-paid employee benefits: Food and beverage  

200


To view the remainder of this page, please log in or register for basic view or get professional view.

Log in - Basic view - Professional view

Basic view is free and allows up to 3 page views each month.
Professional view has no page limit and allows downloads of all files.