Respuesta :
Answer:
On December 31
Cash $10,430
Cash Equivalent $27,205
Explanation:
Cash includes all the currencies in hand or any asset which could be converted to cash instantly.
The assets with high liquidity is included in cash and cash equivalent balance. These assets can be converted into cash very quickly. These assets normally have 90 days or fewer maturity period.
Answer and Explanation:
Cash in bank $8,540
Petty cash $250
Check from customer $1,350
money order $290
Cash $10,430
The check will be clear with 3 to 4 working days, so it has very short maturity period.
Money order can be collected instantly.
Cash = $10,430
Cash Equivalent
Money market fund balance $10,400
Treasury bill maturing in 60 days $10,000
NSF checks from customers returned by bank $805
Certificate of deposit $6,000
Total Cash Equivalent $27,205
Money Market fund balance normally has maturity of 60 or less.
Checks returned by bank can be recollected from customer in a short period.
CD is Maturing in 90 days from December 31.
Answer:
Cash = $10,430
Cash Equivalents = $27,205
Explanation:
Cash are liquid asset which include cash, checks, and money orders that are payment order for a pre-specified amount of money.
Cash equivalents are items that can easily be converted to cash instantly, and they include NSF checks from customers returned by bank, marketable securities like short-term government bonds and commercial paper.
Based on these, the amounts considered Cash and Cash Equivalents, respectively on December 31 can be calculated as follows:
Cash = Cash in bank account + Petty cash + Checks from customers + Money orders
= $8,540 + $250 + $1,350 + $290
Cash = $10,430
Cash equivalents = Money market fund balance + NSF checks from customers returned by bank + Treasury bill maturing in 60 days + A nine-month certificate of deposit maturing on June 30 of next year
Cash equivalents = $10,400 + $805 + $10,000 + $6,000 = $27,205
Therefore, the amounts considered Cash and Cash Equivalents, respectively on December 31 are $10,430 and $27,205.
