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Gatti Corporation reported the following balances at June 30.   Accounts Payable $155   Accounts Receivable 140   Accumulated...

Gatti Corporation reported the following balances at June 30.
  Accounts Payable $155
  Accounts Receivable 140
  Accumulated Depreciation—Equipment 58
  Cash 24
  Cash Equivalents 29
  Common Stock 240
  Depreciation Expense 70
  Dividends 6
  Equipment 440
  Notes Payable (long-term) 80
  Notes Payable (short-term) 50
  Petty Cash 15
  Restricted Cash (short-term) 20
  Retained Earnings 31
  Salaries and Wages Expense 470
  Service Revenue 620
  Unearned Revenue 54
  Utilities Expense 74
Required:
1. What amount should be reported as “Cash and Cash Equivalents”?
2.

Prepare a classified balance sheet. Do not show the components that add up to your answer in requirement 1 but rather show only the line “Cash and Cash Equivalents.” (Amounts to be deducted should be indicated by a minus sign.)

      

Solutions

Expert Solution

Solution:

1. Calculation of cash and Cash Equivalents:

2.Classified balance sheet

Working:

1)

Retained earning as on June 30 = Beginning balance + Net income(Working) - Dividend

         = $31 + $6 - $6

               = $31

Here,

Net Income = Service revenue -Salaries and wage expense-Depreciation expense-Utilities expense

= $620 - $470 - $70 -$74

= $6

ekkarill92 answered 1 year ago
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