Answer to Question #236623 in Accounting for Another you

Question

1. Red Company provided a year-end report below:
a. Cash -- 20,000
b. Accounts Receivable -- 30,000
c. Allowance for Bad Debts -- 2,500
d. Equipment -- 1,000,000
e. Inventory, including Php 50,000 consigned goods -- 500,000
f. Accumulated Depreciation-Equipment -- 150,000
-What account(s) will you include in the current section of the company's assets? How much will be reported as non-current and total assets respectively?

Answer 1

Current assets are all the assets of a company that are expected to be sold or used as a result of standard business operations over the next year.

Current assets will include;

Cash 20,000

Accounts Receivable 30,000

Goods in Transit 50,000

Inventory 450,000

Total Current Assets 550,000

Non Current Assets will include;

Equipment 1,000,000

Less Accumulated Depreciation-Equipment 150,000

Net Equipment 850,000

Total Assets will be 1,400,000