Newton Company has recorded the following items in its financial records. The checking account 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 investment will be sold in the next 6 to 12 months. The plant expansion project will begin in 3 years.
Instructions
(a) What amount should Newton 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?

Question

Newton Company has recorded the following items in its financial records.  The checking account 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 investment will be sold in the next 6 to 12 months. The plant expansion project will begin in 3 years.
Instructions
(a) What amount should Newton 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?

Quizplus · Accepted Answer

The Answer of Newton Company has recorded the following items in its financial records.  The checking account 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 investment will be sold in the next 6 to 12 months. The plant expansion project will begin in 3 years.
Instructions
(a) What amount should Newton 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?

Newton Company Has Recorded the Following Items in Its Financial