Question

Specter Co. combines cash and cash equivalents on the balance sheet. Using the following information, determine the amount reported on the year-end balance sheet for cash and cash equivalents. $16,000 cash deposit in checking account. $46,000 bond investment due in 20 years. $11,500 U.S. Treasury bill due in 1 month. $850, 3-year loan to an employee. $3,600 of currency and coins. $1,150 of accounts receivable.

Answer 1

Answer:

Specter Co.

The amount reported on the year-end balance sheet for cash and cash equivalents is:

= $31,100.

Explanation:

a) Data and Calculations:

Cash deposit in checking account = $16,000

Bond investment due in 20 years = $46,000

US Treasury bill due in 1 month = $11,500

3-year loan to an employee = $850

Currency and coins = $3,600

Accounts receivable  $1,150

Cash and Cash Equivalents:

Cash deposit in checking account $16,000

US Treasury bill due in 1 month         11,500

Currency and coins                             3,600

Total cash and cash equivalents =  $31,100

b) Cash and Cash Equivalents are Specter's assets that are in the form of cash (currency and coins) and Specter's assets that can be readily converted into cash (Treasury bills and notes, commercial papers. certificates of deposit, money market funds, and cash management pools).