Question

anson Corporation Co.'s trial balance included the following account balances at December 31, 2018: Accounts receivable $12,000 Inventories $40,000 Patent $12,000 Investments $30,000 Prepaid insurance $6,000 Note receivable, due 2021 $50,000 Investments consist of treasury bills that were purchased in November, 2018 and mature in January, 2019. Prepaid insurance is for two years. What amount should be included in the current asset section of Janson's December 31, 2018, balance sheet?

Answer 1

Answer:

Current Assets = $85,000

Explanation:

                         Anson Corporation

                     Balance Sheet (Partial)

                   As at December 31, 2018

Assets

Current Assets:

Accounts receivable      $12,000

Inventories                       40,000

Treasury Bill                     30,000

Prepaid insurance              3,000

Total current assets     $85,000

Prepaid insurance $6,000/2 = $3,000 is for current years. Therefore, $3,000 is a current assets. Since treasury bill is an investment and for 3 months, it is a current assets.