Hamilton Company has cash in bank of $10,000, restricted cash in a separate account of $3,000, and a bank overdraft in an account at another bank of $1,000. Hamilton should report cash of a. $9,000. B. $10,000. C. $12,000. D. $13,000.

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Niki

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2 May, 01:06

Hamilton Company has cash in bank of $10,000, restricted cash in a separate account of $3,000, and a bank overdraft in an account at another bank of $1,000. Hamilton should report cash of a. $9,000. B. $10,000. C. $12,000. D. $13,000.

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Reuben Willis · Answer 1

Hamilton should report cash of $10,000.

Option B

Explanation:

Given: Cash in bank is $10,000; Restricted cash in separate account is $3000

Restricted cash of $3000 is the cash that is not available for immediate use. This cash cannot be used by the company till the stipulated period of time or any event in the future. So, this cannot be reported under cash balance. Moreover, the overdraft of $1000 is a liability account so this can also not be reported under cash balance.

Therefore, the cash in bank of $10,000 can only be reported.