Current assets

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    Topic
  • #193937
    Anonymous
    Inactive

    Clear Co’s trial balance has the following selected accounts:

    Cash (includes $10,000 in bond-sinking fund for long-term bond payable) $50,000

    Accounts receivable 20,000

    Allowance for doubtful accounts 5,000

    Deposits received from customers 3,000

    Merchandise inventory 7,000

    Unearned rent 1,000

    Investment trading securities 2,000

    What amount should Clear report as total current assets in its balance sheet?

    A. $64,000

    B. $67,000

    C. $72,000

    D. $74,000

    answer A


    I got Cash, AR net of allowance, inventory, and trading securities as current assets so 50,000 + 20,000 + (5,000) + 7,000 + 2,000 = 74,000. Is this not right?

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  • #665202
    San27
    Member

    You have to subtract out the $10,000 in the bond sinking fund. It is cash held by an independent trustee that is set aside for buying back bonds and is invested by the trustee. It is usually a long term asset.

    All done.

    #665203
    Anonymous
    Inactive

    Doh, silly me. Much thanks.

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