Answer:
the total dollar amount of assets to be classified as current assets is $220,000.
Note that the correct option is $220,000 based on the information provided in the question. However, this is not included in the option. Kindly confirm the correct options from your teacher.
Explanation:
Current assets can be described as a group of assets that are can be easily converted to cash within a year. Current assets are therefore assets which are expected to be used, sold or consumed in a normal business operations within a financial year.
Current assets is one of th component of a balance sheet and its components include cash, inventories, account receivables, advance payment (prepayments), and others.
For this question, the total dollar amount of assets to be classified as current assets can be determined as follows:
Carne Auto Supplies
Current Assets Amount Determination
December 31, 2012
<u>Particulars Amount ($)</u>
Cash 60,000
Prepaid Insurance 40,000
Accounts Receivable 50,000
Inventory <u> 70,000 </u>
Total current assets <u> 220,000 </u>
Therefore, the total dollar amount of assets to be classified as current assets is $220,000.
