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Richter Industries has the following items:

Currency $27,500
Customer checks that have not been deposited 850
U.S. government bonds that originally maturing in 3 months 11,000
U.S. government bonds that originally maturing in 12 months 14,000
Cash in saving and checking accounts 50,000
Certificates of deposits that originally maturing in 18 months 47,000
Required:

How much should Richter report as cash and equivalents on its balance sheet?

Respuesta :

TomShelby

Answer:

Total Cash and Cash equivalent                    89,350‬

Explanation:

Cash and cash equivalent is composed of the cash and all items that could be converted into cash within a short period of 90 days.

Within a period of 90 days all these items will become cash or already are cash.

  • Currency      27,500
  • Customer checks that have not been deposited 850
  • U.S. government bonds that originally maturing in 3 months 11,000
  • Cash in saving and checking accounts 50,000      

Total Cash and Cash equivalent                    89,350‬

U.S. government bonds that originally maturing in 12 months 14,000

Certificates of deposits that originally maturing in 18 months 47,000

These are not considered as they mature (become liquid in a longer period than 90 days (3-months)

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