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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Exercise 4-50 Cash Reporting OBJECTIVE a Brown Industries has the following items:

Currency $15,500

Customer checks that have not been deposited 675

Cash in saving and checking accounts 35,000

Certificates of deposits that originally matured in 18 months 44,000

US. Government bonds that originally matured in 2 months 8000

US. Government bonds that originally matured in 12 months 10,000

(Continued )

Required:

How much should Brown report as cash and eqnivaiems on its balance sheet?

To determine

Concept Introduction:

Cash and Cash Equivalents:

Cash is the category that includes currency, coins, and deposits in bank accounts. Cash Equivalent is the category which includes short term and highly liquid assets which are readily convertible into cash. Liquidity is the term used for company’s ability of payoff its liabilities.

To Calculate:

The amount of cash and Cash Equivalent.

Explanation

The amount of cash and Cash Equivalent is calculated as follows:

Currency  $15,500

Customer’s checks   $675

Cash in Saving an...

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