The Barden Company provides the following trial balance as of December 31, 2018.

Question

The Barden Company provides the following trial balance as of December 31, 2018.

What would Barden report as current assets on its balance sheet?

Debit Credit Cash and cash equivalents $ 345,000 Accounts receivable 115,000 Inventory 120,000 Prepaid insurance 7,500 Prepaid rent 40,000 Equipment 265,000 Accumulated depreciation – Equipment 65,000 Accounts payable 45,000 Accrued liabilities 10,000 Notes payable, due in 2020 135,000 Common stock 300,000 Additional paid-in capital 87,500 Retained earnings 250,000 Total $ 892,500 $ 892,500

Explanation / Answer

Current Assets include Accounts receivable, Inventory, Prepaid expenses, cash and cash equivalents, short-term investments.

Restricted cash (that is, cash that cannot be withdrawn or used for current operations), depreciable assets, receivables that are not due in 12 months or less, and land are examples of things that are not current assets.

Current Assets = 345,000 + 115,000 + 120,000 + 7,500 + 40,000

= $627,500

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