Question

The following information is available for Birch Company at December 31: Cash in registers $ 2,910 Investment maturing in 9 years $ 16,200 Accounts receivable $ 1,775 Cash in bank account $ 23,631 Accounts payable $ 770 Cash in petty cash fund $ 320 Inventory of postage stamps $ 30 U.S. Treasury bill maturing in 15 days $ 11,200 Based on this information, Birch Company should report Cash and Cash Equivalents on December 31 of:

Answer 1

Based on the various account balances that Birch Company has, they should report a total of $38,061 for Cash and Cash equivalents.

Cash and Cash Equivalents are the actual cash that a company holds as well as those that can readily be converted to cash.

They include:

• Actual cash
• Cash in bank
• Cash in petty cash
• U.S. Treasury bills
• Money market funds

The total of cash and cash equivalent here are:

= Cash in registers + Cash in bank + Cash in petty cash + U.S. Treasury bills

= 2,910 + 23,631 + 320 + 11,200

= $38,061

In conclusion, Birch Company has Cash and Cash Equivalents of $38,061.

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