Question

Terracotta, Inc. reported the following accounts and amounts (in millions) in its financial statements for the year ended November 30, 2013.

Accounts Payable	$	750
Accounts Receivable		670
Accumulated Amortization		480
Accumulated Depreciation		820
Allowance for Doubtful Accounts		40
Cash and Cash Equivalents		860
Equipment		5,255
Income Taxes Payable		40
Notes Payable (long-term)		1,800
Notes Payable (short-term)		30
Notes Receivable (long-term)		240
Prepaid Rent		300
Retained Earnings		7,230
Service Revenue		480
Short-term Investments		2,640
Software		635
Unearned Revenue		810

Prepare the current assets section of its balance sheet. The Allowance for Doubtful Accounts relates entirely to Accounts Receivable. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

Answer 1

Ans:

TERRACOTTA, INC. Partial Balance Sheet
As of November 30, 2013 (in millions of dollars)
Statement showing computations
Particulars	Amount $	Amount $
Current Assets:
Cash and Cash Equivalents	860.00	860.00
Short-term Investments	2,640.00	2,640.00
Accounts Receivable	670.00
Allowance for Doubtful Accounts	(40.00)
Accounts Receivable, net of Allowance = 670 - 40		630.00
Prepaid Rent	300.00	300.00
Total Current Assets		4,430.00