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Intermediate Accounting related question
#1
I got this take-home quiz, and I got all but this one problem. I'm confused about where I misclassified which account. Here's the question:









Bob's Corp's trial balance reflected the following account balances at Dec. 31, 2004:

Accounts Receivable (net): 19,000
Trading Securities: 6,000
Accumulated Depreciation on equipment and furniture: 15,000
Cash: 11,000
Inventory: 30,000
Equipment: 25,000
Patent: 4,000
Prepaid Expenses: 2,000
Land Held for future business site: 18,000

In Bob's Dec. 31, 2004 balance sheet, the current assets total is:
a. 85,000
b. 77,000
c. 72,000
d. 68,000





I know that depreciation, equipment, and patent is not a current asset. According to Google, Trading Securities is under debt/equity, so it shouldn't be a current asset. Land held for future business site sounds like property, which makes it a non current asset account.





This is what I added then:

Accounts Receivable (net): 19,000
Cash: 11,000
Inventory: 30,000
Prepaid Expenses: 2,000

19,000 + 11,000 + 30,000 + 2,000 = $62,000

This matches none of the answers. Did I misclassified an account? Did Google lie to me and trading securities is actually a current asset?


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Intermediate Accounting related question - by IllegallySane - 2010-04-17, 09:56 PM

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