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Lecture 02 Cash Equivalents

Chelsea Company reported three types of investment securities totaling P4,500,000, including P1,000,000 in actively traded shares, P2,000,000 in government treasury bills with two months to maturity, and P1,500,000 in commercial papers with one and a half months to maturity. Only the treasury bills and commercial papers qualify as cash equivalents due to their short-term nature. Therefore, the total amount to be reported as cash equivalents is P3,500,000.

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19 views1 page

Lecture 02 Cash Equivalents

Chelsea Company reported three types of investment securities totaling P4,500,000, including P1,000,000 in actively traded shares, P2,000,000 in government treasury bills with two months to maturity, and P1,500,000 in commercial papers with one and a half months to maturity. Only the treasury bills and commercial papers qualify as cash equivalents due to their short-term nature. Therefore, the total amount to be reported as cash equivalents is P3,500,000.

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science.molecule
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Lecture 02: Cash Equivalents

Chelsea Company reported the following information at the end of the current year.

✔ Investment securities of P1,000,000. These securities are share investments in entities


that are traded in the Philippine Stock Exchange.

As a result, the shares are very actively traded in the market.

✔ Investment securities of P2,000,000. These securities are government treasury bills.

The treasury bills have a 10- year term and purchased on November 30 at which time
they had two months to go until they mature.

✔ Investment securities of P1,500,000. These securities are commercial papers or money


market placements.

The term of the commercial papers is three months and the instruments were purchased
on December 31 at which time they had one and a half month to go until they mature.

What total amount should be reported as cash equivalents at the end of current year?

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