Question

anson Corporation Co.'s trial balance included the following account balances at December 31, 2021: Accounts receivable $13,800 Inventory 42,000 Patent 12,200 Investments 30,700 Prepaid insurance 7,700 Notes receivable, due 2024 51,800 Investments consist of treasury bills that were purchased in November, 2021, and mature in January, 2022. Prepaid insurance is for two years. What amount should be included in the current assets section of Janson’s December 31, 2021, balance sheet?

Answer 1

Answer:

$90,350

Explanation:

Accounts receivable $13,800 ⇒ current assets

Inventory 42,000 ⇒  current assets since the company expects to sell them in less than a year

Patent 12,200 ⇒ intangible non-current asset

Investments 30,700 ⇒ current asset since they mature in less than one month

Prepaid insurance 7,700 ⇒ only half of it is considered a current asset since it covers a 2 year period

Notes receivable, due 2024 51,800 ⇒ non-current asset

total current assets = $13,800 + $42,000 + $30,700 + ($7,700/2) = $90,350