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Tallent Corporation had the following account balances at December 31, Year 1: Cash on hand and in banks $975,000 Cash legally restricted for additions to plant (expected to be disbursed in Year 3) 600,000 Bank certificates of deposit (due February 1, Year 2, purchased September 1, Year 1) 250,000 In the current assets section of Tallent’s December 31, Year 1, balance sheet, what total amount should be reported under the caption "cash and cash equivalents"? $975,000 $1,575,000 $1,825,000 $1,225,000

Respuesta :

Answer:

$975,000

Explanation:

The computation of the total amount reported under the cash and cash equivalent is shown below:

= Cash on hand and in banks

= $975,000

The other items like bank certificate of deposit i.e for $600,000 should not be included as it is excluded under the definition of the cash and cash equivalents and the $600,000 is also excluded for additions made to plant

Hence, the first option is correct

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