D is corrent. Current assets are cash and other assets that are expected to be converted into cash, sold, or consumed either in 1 year or in the operating cycle, whichever is longer. Included in this category are cash, temporary investments in marketable securities, short-term receivables, inventories, and prepaid expenses. In this case, total current assets are $63,000.| Accounts receivable (net) | $16,000 | | Short-term investments | 5,000 | | Cash | 11,000 | | Inventory of merchandise | 30,000 | | Prepaid expenses | 1,000 | | Total | $63,000 |
Equipment and furniture ($25,000) and accumulated depreciation ($15,000) are reported in the property, plant, and equipment section. Patent ($4,000) is reported as an intangible asset, (always long-term), and land held for future business site ($18,000) is reported as a long-term investment.A is incorrect because it incorrectly includes net equipment and furniture. B is incorrect because it incorrectly includes the patent. C is incorrect because it incorrectly includes land held for future business site. |
