Question

Use the following data to determine the total dollar amount of assets to be classified as current assets

Answer 1

Answer:

the total dollar amount of assets to be classified as current assets is $220,000.

Note that the correct option is $220,000 based on the information provided in the question. However, this is not included in the option. Kindly confirm the correct options from your teacher.

Explanation:

Current assets can be described as a group of assets that are can be easily converted to cash within a year. Current assets are therefore assets which are expected to be used, sold or consumed in a normal business operations within a financial year.

Current assets is one of th component of a balance sheet and its components include cash, inventories, account receivables, advance payment (prepayments), and others.

For this question, the total dollar amount of assets to be classified as current assets can be determined as follows:

                  Carne Auto Supplies

    Current Assets Amount Determination

                  December 31, 2012

Particulars                                      Amount ($)

Cash                                                   60,000  

Prepaid Insurance                             40,000  

Accounts Receivable                        50,000  

Inventory                                           70,000  

Total current assets                       220,000  

Therefore, the total dollar amount of assets to be classified as current assets is $220,000.