At December 31, 1995, Del Monte Co. had the following balances in the accounts it maintains at Royal Street Bank:
Checking account #101 $175,000
Checking account #102 $(10,000)
Money market account $25,000 -
90-day certificate of deposit due 2/28/96 $50,000
180-day certificate of deposit due 3/15/96 $80,000
Del Monte classifies investments with original maturities of 3 months or less as cash equivalents. In its December 31, 1995 balance sheet, what amount should
Del Monte report as cash and cash equivalents?
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A. B. C. D. E.A
Cash consists of coins, currency on hand, checking accounts (demand deposits), certificates of deposit (time deposits) and near-cash assets (money market accounts). Cash equivalents are limited to investments with original maturities to the holding entity of 3 months or less. As a result, cash and cash equivalents will be $240,000 ($175,000 - 10,000 + 25,000 + 50,000).