Question

An accountant has recently received the following information related to Hoffman Company’s December 31, 2019, balance sheet. What Is the Value of the Current asset?

Prepaid insurance

$ 2,300

Accounts receivable

$1,100

Cash

800

Inventory

3,400

Equipment

2,700

Acc Dep - Equipment

10,700

CopyRight

16,000

Short term Investment

9,300

Select one:

a. $7,600

b. $10,700

c. $23,600

d. $16,900

Answer 1

Answer to above question is $16,900,

This above figure comprised off

Prepaid expenses,Cash,Accounts receivables,Inventory and short term investment.

Current asset are those assets which is expected to be realised or consumed within a operating cycle or within 12 month from end of reporting period,

Inventory held for trade is always classified as current asset, Cash is most liquid asset in current asset.

Please comment for any additional explanation,

Thanks,