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# How to Report Cash on a Balance Sheet

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Question: Jackson Company had the following cash balances at December 31: Cash in banks .......... P375,000; Petty cash funds (all funds were reimbursed on December 31) ........ 5,000; Cash in banks includes P125,000 of compensating balances against short-term borrowing arrangements at December 31. The compensating balances are legally restricted as to withdrawal by Jackson. In the current asset section of Jackson's December 31 balance sheet, what total amount should be reported as Cash?

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To determine the total amount reported as Cash in the current asset section of Jackson's December 31 balance sheet, we need to consider the available cash balances. 1. Cash in banks: P375,000 2. Petty cash funds: P5,000 3. Restricted compensating balances: -P125,000 (since these are legally restricted, we need to exclude this amount from the available cash) Now, let's calculate the total cash to be reported in the current asset section: Cash in banks: P375,000 + Petty cash funds: P5,000 - Restricted compensating balances: -P125,000 ----------------------------------------- Total Cash: P255,000 So, Jackson should report P255,000 as Cash in the current asset section of their December 31 balance sheet.

April 11, 2023, 1:27 a.m.

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