Final answer:
To calculate cash and cash equivalents for Steinert Company, you need to include cash in bank and petty cash, but exclude postdated checks. Short-term paper with a maturity of 2 months can be considered as cash equivalents and should be included. Steinert should report cash and cash equivalents of $53,700.
Step-by-step explanation:
In order to calculate cash and cash equivalents for Steinert Company, we need to identify the items that qualify as such. Cash in bank and petty cash are both considered as cash and should be included.
However, postdated checks should not be counted as cash until they are due, so we exclude them. Short-term paper with a maturity of 2 months can be considered as cash equivalents because it can be easily converted into cash within a short period of time. Therefore, we include short-term paper with a maturity of 2 months in the calculation.
Using this information, Steinert should report cash and cash equivalents of $45,000 (cash in bank) + $500 (petty cash) + $8,200 (short-term paper with maturity of 2 months) = $53,700.