Question: A friend in your class is confused and asks for your help in understanding cash equivalents: Say a company invests $50,000 in a 60-day certificate

A friend in your class is confused and asks for your help in understanding cash equivalents: “Say a company invests $50,000 in a 60-day certificate of deposit. Since the company obviously used cash to buy the CD, why is this not classified as an investing activity on the statement of cash flows?” How would you respond to your friend’s question?

Step by Step Solution

★★★★★

3.27 Rating (162 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

A 60day certificate of deposit is a cash eq... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

79-B-M-A-S-C-F (551).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Your roommate asks for your help in understanding the two types of cost accounting systems. (a) Distinguish between the two types of cost accounting systems for your roommate. (b) Explain to your...

As a manager, how would you respond to each of the following situations? What kind of helpful advice can you give to each party? a. Alton gets angry when several of the people he works with talk...

How would you respond to McKennah Labrums comment? Jarrick Tilby recently received a degree in business administration from a small university and went to work for Alcam Electronics, a manufacturer...

1 What are the main components of personal financial planning? Solve What is the purpose of a financial plan? Solve Identify some common actions taken to achieve financial goals. How does a job...

Cash Equivalents Afriend in your class is confused and asks for your help in understanding cash equivalents: Say a company invests $50,000 in a 60-day certificate of deposit. Since the company...

Hi, I have an Assignment for my Finance Subject. I have attached the necessary documentation here for you to view including the Lecture slides of all the Topics covered for this assignment. Please...

I need help with writhing a financial statement analysis report about Company Sprint Airline. I have attached the documents including the overview of the project and the template of it and example of...

Cash Equivalents A friend in your class is confused and asks for your help in understanding cash equivalents: Say a company invests $50,000 in a 60-day certifi cate of deposit. Since the company...

I have attached both the chapters from which you will be answering the following question. Ch 8 (p 387 of text or p 35 of the pdf) ?Exercise D. Prepare the bank reconciliation and any required...

Which of the following is NOT included as high-quality liquid assets when computing a liquidity coverage ratio? Sovereign debt. Treasury Securities. Government-guaranteed mortgage-backed securities....

3) Mabel bought new laptops at a cost of $5000 at 10% add-on interest for 5 years. Find the APR.

Which type of loan is the dominant form of installment loans? a . Vacation b . New car c . Appliances d . Home furnishings

Joanna bought only $0.15 stamps and $0.29 stamps. How many $0.15 stamps did she buy? (1) She bought $4.40 worth of stamps. (2) She bought an equal number of $0.15 stamps and $0.29 stamps.

Interest Receivable On June 1, 2008, MicroTel Enterprises lends $60,000 to MaxiDriver Inc. The loan will be repaid in 60 days with interest at 10%. Required 1. Prepare the journal entry on MicroTels...

Property Taxes PayableAnnual Adjustments Lexington Builders owns property in Kaneland County. Lexingtons 2007 property taxes amounted to $50,000. Kaneland County will send out the 2008 property tax...

Interest Payable Billings Company takes out a 12%, 90-day, $100,000 loan with First National Bank on March 1, 2008. Required 1. Prepare the journal entry on March 1, 2008. 2. Prepare the adjusting...

Here is a recursive method for counting all zeroes in an array starting with a given position: public static int zeroes ( int [ ] a , int pos ) { if ( pos = = a . length ) { return 0 ; } int result =...

3. Profitability ratios Profitability ratios help in the analysis of the combined impact of liquidity ratios, asset management ratios, and debt management ratios on the operating performance of a...

please show all calucations clearly, thank you!! financial calculator inputs if possible as well 12. You are considering two independent projects with the following cash flows. The required return...