Question

Cashmere Soap Corporation had the following items listed in its trial balance at 12/31/2016:

Currency and coins $ 650
Balance in checking account 2,600
Customer checks waiting to be deposited 1,200
Treasury bills, purchased on 11/1/2016, mature on 4/30/2017 3,000
Marketable equity securities 10,200
Commercial paper, purchased on 11/1/2016, mature on 1/30/2017 5,000
What amount will Cashmere Soap include in its year-end balance sheet as cash and cash equivalents?
A) $9,450.
B) $12,450.
C) $7,450.
D) $19,650.

Answer 1

Option A.

Step-by-step explanation:

On 12/31/2016

Currency and coins = $650

Balance in checking account = $2600

Customer checks waiting to be deposited = $1,200

Treasury bills, purchased on 11/1/2016, mature on 4/30/2017 = $3,000

Marketable equity securities = $10,200

Commercial paper, purchased on 11/1/2016, mature on 1/30/2017 = $5,000

We need to find the amount of cash and cash equivalents in its year-end balance sheet.

We need to add Currency and coins, Balance in checking account, Customer checks waiting to be deposited and Commercial paper.

`Cash=\$650 + \$2,600 + \$1,200 + \$5,000 = \$9,450`

Therefore, the correct option is A.