Mena Company had the following account balances at December
31, year 2:

Question

Cash in banks $2,250,000

Cash on hand 125,000

Cash legally restricted for additions

to plant (expected to be disbursed in

year3) 1,600,000

Cash in banks includes $600,000 of compensating balances

against short-term borrowing arrangements. The compensating

balances are not legally restricted as to withdrawal by

Mena . In the current assets section of Mena’s December31, year

2 balance sheet, total cash should be reported at

a. $1,775,000

b. $2,250,000

c. $2,375,000

d. $3,975,000

Mir Mujtaba Ali · Answer

c. $2,375,000<<<<<<<<<>>>>>>>>>>>>

Ramesh Potharla · Answer

Answer C is correct, Total Cash will be shown as Current Assets, where as the outstanding for Bank Borrowings can be shown in Current Liabilities side.

Ashish Premi · Answer

c. $2,375,000...........................................

sudheer abbas · Answer

appropriate ans is $2,375,000

Ahmed Abdi Mahad · Answer

As you may understand the basic accounting equation is 
Assets = Liabilities + Capital 
So, since the information from the given data doesn't state that the $600,000 short term borrowings is repaid, then there is no reason to deduct this amount from ending cash balance and you cannot also day duct it from the current liabilities as there is payment effected to the specific creditor from whom the amount was borrowed. This means this $600,000 must reported as a current liability. 
 
Thus, choice C, $2,375,000 is the answer for your question.

Ahmed kandil · Answer

Answer C is the correct answer

Khurram Shaukat Memon · Answer

Option A because Rs.600,000 are still payable, even though not legally restricted and so should be shown as current liabilities.

Md Abdul Rahim Khan · Answer

December31 year2 mena's total Current balance should be7,75,000

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Mena Company had the following account balances at December 31, year 2:

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