On December 31, a company has the following bank accounts and corresponding cash balances:California BankOperating - Summit Ridge ($400,000) Operating - Bakersville 300,000Operating - Smithville 50,000Savings 500,000Sedona BankChecking ($375,000) How should the company report the above bank account balances in the balance sheet at December 31? A. Cash of $75,000. B. Cash of $450,000 and a liability of $375,000. C. Cash of $850,000 and a liability of $775,000. D. Cash of $800,000 and a liability of $725,000.

Question

Business

Albert Fisher

9 April, 10:50

On December 31, a company has the following bank accounts and corresponding cash balances:California BankOperating - Summit Ridge ($400,000) Operating - Bakersville 300,000Operating - Smithville 50,000Savings 500,000Sedona BankChecking ($375,000) How should the company report the above bank account balances in the balance sheet at December 31? A. Cash of $75,000. B. Cash of $450,000 and a liability of $375,000. C. Cash of $850,000 and a liability of $775,000. D. Cash of $800,000 and a liability of $725,000.

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Answers (1)

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Asa · Answer 1

A. Cash of $75,000.

Explanation:

Net sum of all accounts = ($400,000) + $300,000 + $50,000 + $500,000 + ($375,000)

= $75,000

Given that the net position is positive, this will be recorded as cash of $75,000 in the balance sheet at December 31.

Therefore, the right answer is A. Cash of $75,000.