Flax Company has recorded the following items in its financial records.

Cash in bank……………………………...…..                   $ 47,000

Cash in plant expansion fund…………….…..           100,000

Cash on hand…………………………………                       12,000

Highly liquid investments……………………                 34,000

Petty cash…………………………………….                              500

Receivables from customers………………….              89,000

Stock investments……………………………                     61,000

The cash in bank is subject to a compensating balance of $5,000. The highly liquid investments had maturities of 3 months or less when they were purchased. The stock investments will be sold in the next 6 to 12 months. The plant expansion project will begin in 3 years.

Instructions

(a) What amount should Flax report as “Cash and cash equivalents” on its balance sheet?

(b) Where should the items not included in part (a) be reported on the balance sheet?

(c) What disclosures should Flax make in its financial statements concerning “cash and cash equivalents”?