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 <u>$290</u>
<u>
</u>Cash <u>$10,430</u>
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 <u>$6,000 </u>
Total Cash Equivalent <u>$27,205</u>
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.