Question

Blossom Company's trial balance reflected the following account balances at December 31, 2020: Accounts receivable (net) $40000 Trading securities 13000 Accumulated depreciation on equipment and furniture 29500 Cash 30500 Inventory 58500 Equipment 49000 Patent 7200 Prepaid expenses 5000 Land held for future business site 35000 In Blossom’s December 31, 2020 balance sheet, the current assets total is ________.

Answer 1

Answer:

The total of current assets amounts to $147,000

Explanation:

Current assets are those kinds of assets which are converted to cash or into liquid within a year or less. The current assets involve the  inventory, cash and cash equivalents, accounts receivable, prepaid expenses and marketable securities.

The total current assets will be computed as:

Current assets = Accounts Receivable + Cash + Inventory + Trading securities + Prepaid expenses

where

Accounts Receivable amounts to $40,000

Inventory amounts to $58,500

Cash amounts to $30,500

Prepaid expense amounts to $5,000

Trading securities amounts to $13,000

Putting the values above:

Current assets = $40,000 + $58,500 + $30,500 + $5,000 + $13,000

Current assets = $147,000