Legally restricted compensating balance
NettetSince the compensating balance is legally restricted, it is excluded from the amount shown as cash. In this case, the compensating balance is shown as “cash held as … NettetCash Fund. This fund is set aside for current purposes such as petty cash fund, payroll fund and dividend fund. Cash Equivalents. PAS 7, paragraph 6, "_____________ are highly liquid investments that are readily convertible into cash and so near their maturity that they present insignificant risk of changes in value because of changes in ...
Legally restricted compensating balance
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Nettet7 December 31, 2009, West Company had the following cash balances: Cash in banks P1,800, Petty cash funds (all funds were reimbursed on 12/31/09) 50, Cash in banks … Nettet32. Deposits held as compensating balances a. usually do not earn interest. b. if legally restricted and held against short-term credit may be included as cash. c. if legally restricted and held against long-term credit may be included among current assets. d. none of these. *67.
NettetAntok Company had the following account balances on December 31, 2015: Cash in bank 670, Cash on hand 310, Petty cash fund 35, Cash restricted for additional plant in … Nettet31. des. 2024 · The compensating balance is legally restricted as to withdrawal. A check of P1,000,000 dated January 31, 2024 in payment of accounts payable was recorded and mailed on December 31, 2024. What amount should be reported as cash and cash equivalents on December 31, 2024? a. 6,350,000 b. 7,850,000
NettetSaving account balance b. Loan account with bank c. Temporary investment serving as collateral for loan d. Minimum deposit required to be maintained in connection with … NettetDeposits held as compensating balances a) if legally restricted and held against long-term credit may be included among current assets. b) none of these. c) usually do not …
Nettet31. des. 2024 · The compensating balance is legally restricted as to withdrawal. A check of P1,000,000 dated January 31, 2024 in payment of accounts payable was …
NettetIf a compensating balance arrangement legally restricts the use of cash, such amounts should be considered restricted cash. See FSP 6.5.3 for further discussion of this general principle. Cash that cannot be withdrawn due to compensating balance arrangements … charity eye clinicNettetThe carrying amounts of cash and cash equivalent items which are restricted as to withdrawal or usage. Restrictions may include legally restricted deposits held as compensating balances against short-term borrowing arrangements, contracts entered into with others, or entity statements of intention with regard to particular deposits; … charity eylerNettet31. des. 2024 · Question: 3. Burr Company had the following account balance at December 31, 2024: Cash in bank 2,250,000 Cash on hand 125,000 Cash legally restricted for additions to plant (expected to be disbursed in 2024) 1,600,000 Cash in bank includes P600,000 of compensating balance against short-term borrowing … harry cushmanNettetCash on hand. Classify cash item: bank drafts. Cash on hand. Classify cash item: money orders. Cash in bank. cash that includes demand deposit or checking account and saving deposit which are unrestricted as to withdrawal. Cash in bank. Classify cash item: Demand deposit/ checking account. Cash in bank. harry custom roboNettet31. des. 2024 · Accounting questions and answers. Zivales Corp. had the following amounts at December 31, 2024. Description Amount Amount on deposit in a checking account $10,000 Certificate of deposit, 2-month term 2,500 Legally restricted compensating balance on deposit. harry cushingNettet- In its natural sense, compensating balance is a deduction from the proceeds acquired out of borrowing. - In effect, it is as if a required "deposit"* by the bank to be maintained in relation to the borrowing or loan. Classifications: (1) Not legally restricted • The contract or agreement with the bank is considered "informal". • Part of Cash harry customsNettetcompensating balances are minimum cash balances that debtors are required to keep on deposit as support for existing credit agreements that are part of a contractual agreement. companies classify legally restricted compensating balances as follows: 1- If the balance is held against short-term debt, ... charity eyre instagram