Problem on cash and cash equivalents


Nayak Company has recorded the following items in its financial records.

Cash in bank $41,000
Cash in plant expansion fund 100,000
Cash on hand 8,000
Highly liquid investments 34,000
Petty cash 500
Receivables from customers 89,000
Stock investments 61,000

The cash in bank 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 investments will be sold in the next 6 to 12 months. The plant expansion project will begin in 3 years.

What amount should Nayak report as "Cash and cash equivalents" on its balance sheet?

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Accounting Basics: Problem on cash and cash equivalents
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