Answer:
Dunn Sporting Goods
Identifying Current Assets and Current Liabilities
Current Assets:
1. Prepaid Rent $6,000
3. Inventory $46,230
4. Marketable securities $700
5. Cash $1,050
7. Account receivable $2,850
Current Liabilities:
2. Accounts payable $9,700
6. Interest Payable $4,500
Explanation:
a) Data and Analysis:
1. Prepaid Rent (Current Assets) $6,000 Prepaid Rent (Long-term Assets) $2,500 in the amount of $8,500. Dunn's rent is $500 per month.
2. Account payable $9,700
3. Inventory (Current assets) $46,230.
4. Short-term marketable securities $700 Long-term Investments $1,200
5. Cash (current assets) $1,050.
6. Loan Payable (long-term) $60,000 due in March 2024. Interest Payable (current liabilities) $4,500
7. Account receivable (Current assets) $2,850
8. Store equipment $9,200. Accumulated depreciation $1,250.
b) Current assets are short-term assets expected to be used up within 12 months while current liabilities are short-term assets expected to be settled within 12 months.
