Richter Industries has the following items:

Currency $27,500
Customer checks that have not been deposited 850
U. S. government bonds that originally maturing in 3 months 11,000
U. S. government bonds that originally maturing in 12 months 14,000
Cash in saving and checking accounts 50,000
Certificates of deposits that originally maturing in 18 months 47,000
Required:

How much should Richter report as cash and equivalents on its balance sheet?

Total Cash and Cash equivalent                    89,350‬

Explanation:

Cash and cash equivalent is composed of the cash and all items that could be converted into cash within a short period of 90 days.

Within a period of 90 days all these items will become cash or already are cash.

Total Cash and Cash equivalent                    89,350‬

U.S. government bonds that originally maturing in 12 months 14,000

Certificates of deposits that originally maturing in 18 months 47,000

These are not considered as they mature (become liquid in a longer period than 90 days (3-months)

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