Question
PorkChop Company has recorded the following items in its financial records. Cash in bank: Checking account $27,000 Money market fund 13,000 Payroll account 3,000 Certificate
PorkChop Company has recorded the following items in its financial records.
Cash in bank:
Checking account $27,000
Money market fund 13,000
Payroll account 3,000
Certificate of deposit (matures in 2 months) 5,000
Certificate of deposit (matures in 12 months) 10,000 $ 58,000
Cash in plant expansion fund 120,000
Cash on hand 11,000
Highly liquid investments 30,000
Petty cash 300
Receivables from customers 99,000
Stock investments 61,000
U.S.Treasury bills 20,000
The checking account is subject to a compensating balance of $5,000. The highly liquid investments had maturities of three 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 three years.
Instructions:
What amount should PorkChop report as "Cash and cash equivalents" on its balance sheet?
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