Question

Use the information in the adjusted trial balance presented below to calculate current assets for Wicked Wicker Company:
Account Title Dr. Cr.
Cash $ 26,000
Accounts receivable 17,000
Prepaid insurance 7,000
Equipment 110,000
Accumulated depreciation—
Equipment $ 55,000
Land 96,000
Accounts payable 18,000
Interest payable 2,650
Unearned revenue 5,300
Long-term notes payable 33,000
Retained earnings 142,050
Totals $ 256,000 $ 256,000

Answer 1

Answer:

Current Asset = $50,000

Explanation:

Current asset is the asset that can be converted to cash within a year or a short period.

Wicked Wicker Company

Current Assets

Cash                                    $  26,000

Accounts receivable               17,000

Prepaid insurance                   7,000

Total current assets            $50,000

Cash is the most liquid asset, so it is a current asset. Accounts receivable can also be collected within a year. So, it is also an existing asset. Insurance is taken for one year in advance; hence, it is a current asset.