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3 May, 19:47

The following are held by Smite Co.

Cash in checking account $20,000

Cash in bond sinking fund account $30,000

Post-dated check from customer

dated one month

from balance sheet date $250

Petty cash $200

Commercial paper

(matures in two months) $7,000

Certificate of deposit

(matures in six months) $5,000

What amount should be reported as cash and cash equivalents on Smite's balance sheet?

A) $57, 200

B) $32, 200

C) $27, 450

D) $27, 200

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Answers (1)
  1. 3 May, 23:00
    0
    D) $27, 200

    Explanation:

    Cash in the checking account and petty cash are considered cash directly. Cash equivalents are securities that can be converted into cash within a 90 day period.

    cash and cash equivalents are = checking account + petty cash + commercial paper = $20,000 + $200 + $7,000 = $27,200
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