The balances of select accounts of Sandra Inc.as of December 31,2015 are given below:
-The insurance has been prepaid for the next half year.Determine the amount of total current assets reported on the balance sheet.
A)$10,500
B)$5,700
C)$8,650
D)$6,150

Question

The balances of select accounts of Sandra Inc.as of December 31,2015 are given below:  
-The insurance has been prepaid for the next half year.Determine the amount of total current assets reported on the balance sheet.
A)$10,500 
B)$5,700 
C)$8,650 
D)$6,150

Quizplus · Accepted Answer

The total current assets include cash, accounts receivable, inventory, and prepaid insurance. From the given balance sheet, we can see that the cash balance is $2,950, accounts receivable is $3,700, and inventory is $1,000. Prepaid insurance is also a current asset, but it needs to be adjusted for the portion that has been already used (prepaid for the next half year as given in the question). As half year is already gone, the amount that needs to be adjusted is $1,000/2 = $500. So, the total current assets would be $2,950 + $3,700 + $1,000 - $500 = $8,150. Therefore, the best choice is C.

The Balances of Select Accounts of Sandra Inc