1 - Intermediate Accounting (Kieso)

Question

(L03) Harding Corporation has the following accounts included in its December 31, 2017, trial balance: Accounts Receivable \(110,000, Inventory \)290,000, Allowance for Doubtful Accounts \(8,000, Patents \)72,000, Prepaid Insurance \(9,500, Accounts Payable \)77,000, and Cash $30,000. Prepare the current assets section of the balance sheet, listing the accounts in proper sequence.

Step-by-Step Solution

Answer

Current assets of the business entity total $431,500.

Definition of Current Assets

Current assets of the business entity can be defined as the resources that will provide monetary benefits to the business entity within one year. It includes receivables, cash, and inventory.

Current asset section

Particular	Amount $	Amount $
Account receivables	$110,000
Less: Allowance for doubtful accounts	(8,000)	$102,000
Inventory		290,000
Prepaid insurance		9,500
Cash		30,000
Total current assets		$431,500