Question

Gatti Corporation reported the following balances at June 30.

Accounts Payable	$	110
Accounts Receivable		70
Accumulated Depreciation—Equipment		40
Cash		10
Cash Equivalents		15
Common Stock		100
Deferred Revenue		40
Depreciation Expense		15
Dividends		5
Equipment		300
Notes Payable (long-term)		60
Notes Payable (short-term)		30
Petty Cash		5
Restricted Cash (short-term)		20
Retained Earnings		40
Salaries and Wages Expense		400
Service Revenue		480
Utilities Expense		60

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.”

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.)

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.) GATTI CORPORATION Balance Sheet 0 0 0 0 $0 $0

Answer 1

Answer-1-Cash and Cash Equivalents:-

Cash	$10
Cash Equivalents	$15
Petty Cash	$5
Total Cash and Cash Equivalents	$30

Note:- Restricted Cash is not a part of Cash and Cash Equivalents

GATTI CORPORATION

Balance Sheet

AS AT JUNE 30

ASSETS	AMOUNT ($)	LIABILITIES	AMOUNT ($)
Current Assets:		Current Liabilities:
Cash and cash equivalent	30	Accounts payable	110
Restricted cash (short term)	20	Notes payable (short term)	30
Accounts receivable	70	Deferred revenue	40
Total Current Assets	120	Total Current Liabilities	180
Non current asset		Non current liabilities
Equipment(Gross) $300		Note payable(long term)	60
less: Accumulated depreciation- equipment ($40)
Net Book value of equipment	260
		Total Liabilities	240
		Stockholders' Equity
		Common Stock	100
		Retained Earnings	40
		Total stockholders equity	140
Total Assets	380	Total Liabilities and Stockholders' Equity	380

Note:

Net Income = service revenue -salaries and wage expense-Depreciation expense-utilities expense

                  =480-400-15-60

                  = $5

Retained earning as on June 30 = Beginning balance + Net income -dividend

                        = 40 + 5 -5

                         = 40

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