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. $6,000 cash deposit in checking account. $26,000 bond investment due in 20 years. $6,500 U.S. Treasury bill due in 1 month. $350, 3-year loan to an employee. $1,600 of currency and coins. $650 of accounts receivable.

Answer 1

Total Cash and Cash Equivalents = $14,100

Step-by-step explanation:

Particulars Amount Reason

Checking Account $6,000 Readily realizable

Bond Investment Nil The bond is due in 20 yrs, hence not readily realizable

U.S. Treasury Bill $6,500 Due in 1 month

Loan to an Employee Nil The loan is for a period of more than 3 months

Currency and Coins $1,600 They are cash itself

Accounts Receivable Nil Accounts receivable is not considered as readily realizable

Total Cash and Cash Equivalents = $14,100