Question

Maxim Company had the following partial listing of accounts and balances at year-end: Cash, $7,000; Accounts Receivable, $6,000; Accounts Payable, $15,000; Equipment, $23,000; Inventories, $5,000; Supplies, $1,000; Land, $75,000; Unearned Service Revenue, $13,000; and Prepaid Rent, $4,000. The total current assets for Maxim Company is ________.a. $19,000.
b. $23,000.
c. $149,000.
d. $98,000.

Answer 1

Answer:

Explanation:

All the assets that are in cash or expected to be converted into cash within next one year are classified as Current Asset e.g cash, inventory etc.

Current Assets

Cash                             $7,000

Accounts Receivable  $6,000

Prepaid Rent,               $4,000

Inventories,                  $5,000

Supplies                       $1,000

Total Current Assets   $23,000

The Following accounts are non current accounts, they belong to Fixed assets / non current assets and Liabilities.

Equipment, $23,000

Land, $75,000

Unearned Service Revenue, $13,000

Accounts Payable, $15,000

Answer 2

Answer:

B. $23,000

Explanation:

Recall that, assets are resources that an individual or an organization has which have future economic value that can be measured,

Thus,

Total current assets = Cash + account receivable + supplies + prepaid rents + inventories.

Therefore

Total current assets = 7000 + 6000 + 1000 + 4000 + 5000

= $23,000

Note: Land is not included in CURRENT asset. Land are longterm assets.