Answer:
Total current assets = $697,750
Explanation:
The partial balance sheet is as follows:
Waterways Corporation
Balance Sheet (Partial)
For the month of November 2016
<u>Details $ $ </u>
<u>Current Assets</u>
Cash 260,000
Accounts Receivable 275,000
Finished Goods Inventory, November 68,800
Raw Materials Inventory, November 52,700
Prepaid Expenses <u> 41,250 </u>
Total current assets 697,750
Note:
Cash is the most liquid of assets.
Accounts receivable which should be collected within 30 to 60 days are less liquid than cash, but more liquid than inventory.
Finished Goods Inventory which is expected to be sold and converted to cash within one year, and Raw Materials Inventory which is expected to be converted to finished good within one year are more liquid than Prepaid expense.
Therefore, the least liquid among current assets’ item above is the Prepaid Expense as it is cash paid for services not yet received..
