As of December 31, 2009, Valley Company has $16,920 cash in its checking account, as well as several other items listed below: What amount should be shown in Valley's December 31, 2009, balance sheet as "Cash and cash equivalents"?

Question

Quizplus · Accepted Answer

Cash and cash equivalents include cash in checking and savings accounts, as well as short-term investments that can be easily converted to cash. Therefore, we need to add the amounts of cash in checking account ($16,920), savings account ($12,000), money market account ($20,000), and short-term investments ($21,200). 
Thus, the total amount of cash and cash equivalents on Valley Company's December 31, 2009 balance sheet is $70,120.

As of December 31, 2009, Valley Company Has $16,920 Cash