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.

Question

Components of Cash The office manager for Stony Company had accumulated the following information at the end of a recent year: Item Amount Accounts receivable $22,470 Change for cash registers (currency and coin) 4,800 Amount on deposit in checking account (bank balance) 7,382 Amount on deposit in savings account (bank balance) 30,000 Balance in petty cash 500 Checks received from customers, but not yet deposited in bank 590 Checks sent by Stony to suppliers, but not yet presented at bank for payment 560 Deposits in transit 920 IOU from Richard Sandy, company president 10,000 Notes receivable 13,400 NSF check written by Liam Company 430 Prepaid postage 125 Required: Calculate the total cash amount Stony will report on its balance sheet.

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Chapter 4, Problem 51E

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.

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Components of Cash The office manager for Stony Company had accumulated the following information at the end of a recent year: Item Amount Accounts receivable $22,470 Change for cash registers (currency and coin) 4,800 Amount on deposit in checking account (bank balance) 7,382 Amount on deposit in savings account (bank balance) 30,000 Balance in petty cash 500 Checks received from customers, but not yet deposited in bank 590 Checks sent by Stony to suppliers, but not yet presented at bank for payment 560 Deposits in transit 920 IOU from Richard Sandy, company president 10,000 Notes receivable 13,400 NSF check written by Liam Company 430 Prepaid postage 125 Required: Calculate the total cash amount Stony will report on its balance sheet.

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