Question

Gershwin Wallcovering Inc. had the following items listed in its trial balance at 12/31/2021: Currency and...

Gershwin Wallcovering Inc. had the following items listed in its trial balance at 12/31/2021:

Currency and coins $ 550
Balance in checking account 2,500
Postdated checks from customers 3,000
Treasury bills, purchased on 11/1/2021,
mature on 4/30/2022		 3,200
Marketable equity securities 10,200
Commercial paper, purchased on 11/1/2021,
mature on 1/30/2022		 4,400

What amount will Gershwin Wallcovering include in its year-end balance sheet as cash and cash equivalents?

Multiple Choice

  • $23,850.

  • $13,650.

  • $7,450.

  • $6,250.

Business   Accounting   
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Answer #1

Ans: The correct option for the answer is option C i.e. $7,450

Following are the items that should be included in cash and cash equivalents

=> Currency And coins i.e. $550

=> Balance in checking Account i.e. 2,500

=> Commercial paper i.e. 4,400

Cash and cash Equivalents Balance= 550+2,500+4,400

=> 7,450

Rest of accounts like Postdated checks from customers,Marketable equity securities and Treasury bills will not be included in Cash And Cash Equivalents

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