The Candy Factory has the following items: cash in a checking account, $1,200; cash in a savings account, $4,390; high-grade government securities,$3,586; accounts receivable, $3209; cash in a compensating balance agreement, $3,200. How much should appear as Cash and Cash Equivalents on the balance sheet?
A) $4,786
B) $9,176
C) $12,385
D) $15,585

Question

Quizplus · Accepted Answer

Cash and Cash Equivalents include cash in a checking account, cash in a savings account, and cash in a compensating balance agreement. Therefore, the total amount of Cash and Cash Equivalents is $1,200 + $4,390 + $3,200 = $8,790. The other items listed, high-grade government securities and accounts receivable, are not considered Cash and Cash Equivalents. Thus, the correct option is B, $9,176, which is the total amount of Cash and Cash Equivalents.

The Candy Factory Has the Following Items: Cash in a Checking