Question

Clear Co.’s trial balance has the following selected accounts: Cash (includes $10,000 in bond-sinking fund for long-term bond payable) $50,000 Accounts receivable 20,000 Allowance for credit losses 5,000 Deposits received from customers 3,000 Merchandise inventory 7,000 Unearned rent 1,000 Investment in trading debt securities 2,000 What amount should Clear report as total current assets in its balance sheet?

Answer 1

Answer:

Explanation:

The computation of the amount that is reported as a total current assets is presented below:

                                                    Clear Co's

Current assets

Cash                                                  $40,000   ($50,000 - $10,000)

Accounts Receivable                       $20,000

less-Allowance for doubtful debts - $5,000

Deposits from customers                 $3,000

Merchandise Inventory                     $7,000

Unearned rent                                    $1,000

Investment in trading debt securities $2,000

Total amount                                      $68,000