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In: Accounting

Based on the following data, what is the amount of current assets? Accounts payable $63500 Accounts...

Based on the following data, what is the amount of current assets?

Accounts payable $63500
Accounts receivable 97500
Cash 66000
Intangible assets 97500
Inventory 132500
Long-term investments 160000
Long-term liabilities 210500
Short-term investments 77500
Notes payable 56500
Property, plant, and equipment 132000
Prepaid insurance 1900

$242900

$375400

$217400

$241000

Solutions

Expert Solution

First of all, let us define what is meant by current aseets. Current assets are the assets of the company that are expected to be conveniently sold, consumed, used or exhausted through normal business operations with in one year. Some of the examples of current aseets are cash, cash equivalents inevntoru, prepaid expense, accounts receivables etc. So in simple words it can be defined as the assets which can be easily convertible to Cash within an year.

In the above questions,

Current assets include,

Accounts receivable. = $ 97,500

Cash. = $ 66,000

Inventory. = $ 132,500

Short term investment = $ 77,500

Prepaid insurance. = $ 1,900

Total. = $ 375,400

Hence, option B is the correct answer.

SUMMARY :

Accounts payable, long term liabilities and notes payable are coming under the liability side of balance sheet and doesn't belong to current assets. Long term investments are the assets of the company which is expected to gain more than one year and doesn't come under current assets. Plant, property and equipment and intangible assets are the fixed assets of the company and doesn't belong to current assets.

Total current assets amounts to $ 375,400.

Hence, option B is the correct answer.

ekkarill92 answered 2 years ago
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