Corporate Financial Accounting
Corporate Financial Accounting
14th Edition
ISBN: 9781305887510
Author: WARREN
Publisher: Cengage
Question
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Chapter 7, Problem 7.2ADM

(a)

To determine

Cash and cash equivalents: Cash is the money readily available in the form of currency. Cash equivalents are the near-cash items, which are readily convertible into cash.  Cash equivalents have a maturity period of three months, or less than 3 months. Cash and cash equivalents are reported in the Current assert section of the balance sheet.

Examples of cash equivalents

  • Certificates of deposit
  • U.S. government securities
  • Corporate notes and bonds
  • Commercial paper

Days’ cash on hand for three years.

(b)

To determine

To interpret: The results.

(c)

To determine

Some ways for a liquidity squeeze.

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