Question

Suppose the following items were taken from the December 31, 2017, assets section of the Boeing Company balance sheet. (All dollars are in millions.)
Inventory $16,933
Patents $12,528
Notes receivable—due after December 31, 2018 5,466
Buildings 21,579 Notes receivable—due before December 31, 2018 368
Cash 9,215
Accumulated depreciation—buildings 12,795
Accounts receivable 5,785
Debt investments (short term) 2,008
Required:
1. Prepare the assets section of a classified balance sheet, listing the current assets in order of their liquidity.

Answer 1

Answer:

Inventory $16,933

Notes receivable—due before December 31, 2018 368

Debt investments (short term) 2,008

Accounts receivable 5,785

Cash 9,215

Explanation:

Current Assets Section consists of Asset items that can be converted into cash within the period of 12 months.

Conversion happens in order of liquidity. Which means how much cash can be realized from conversion of a non-monetary asset in short term.

The order is given as below:

Inventory $16,933

Notes receivable—due before December 31, 2018 368

Debt investments (short term) 2,008

Accounts receivable 5,785

Cash 9,215