Question

QUESTION 50 Using the following information determine the amount that Pearson will report as Cash and Cash Equivalents on the Balance Sheet at the end of December Item Amount Cash is checking account $10,000 Petty cash 580 Postage Stamps 654 Check from customer dated Jan 20, next year 321 3-month certificate of deposit 35,000 12-month certificate of deposit 35,000 Check from customer dated Dec 15, this year 175 Undeposited Cashier's Checks from customer 729 IOU from customer 500 6-month U.S. Treasury bill purchased 4 months ago. 2,500 2-month high-grade Canada government security purchased 1 month ago. 1,000 Cash in savings account 100 Accounts Receivable 3,700 1-month U.S. Treasury bill purchased 2 weeks ago. 2,000 Time Deposits 1,600 OA. 51,009 OB. 53,684 OC.51,184 OD. 50,604

Answer 1

Solution

Answer - Option with $51,184 is the correct Option.

Working:

Amount ($) 10000 580 35000 175 Particulars Cash is checking account Petty cash 3-month certificate of deposit Check from them customer dated Dec 15, this year Undeposited cashier's checks from customer 2-month high grade Canada government security purchased 1 month ago Cash in savings account 1-month U.S Treasury bill purchased 2 weeks ago Time deposits Total cash and cash equivalents 729 1000 100 2000 1600 $51,184 Working: 1. Postage Stamps, Accounts Receivable, post dated Cheques ae not included in cash equivalents 2. Treasury Bill, Certificate of deposit which are maturing after 90 days are not Cash Equivalents. 3.IOU from Customer isdebt owned document oest not qualify as cash Equivalent