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.