Use the following information for questions
The following trial balance of Terracota Corp.at December 31, 2010 has been properly adjusted except for the income tax expense adjustment.

Other financial data for the year ended December 31, 2010:
 Included in accounts receivable is $720,000 due from a customer and payable in quarterly instalments of $90,000.The last payment is due December 29, 2012.
 The balance in the Future Income Tax Liability account pertains to a temporary difference that arose in a prior year, of which $30,000 is classified as a current liability.
 During the year, estimated tax payments of $465,000 were charged to income tax expense.
The current and future tax rate on all types of income is 35 percent.In Terracota's December 31, 2010 balance sheet,
-The current assets total is
A)$5,955,000.
B)$5,595,000.
C)$3,060,000.
D)$4,495,000.

Question

Use the following information for questions 
The following trial balance of Terracota Corp.at December 31, 2010 has been properly adjusted except for the income tax expense adjustment.
  
Other financial data for the year ended December 31, 2010:
 Included in accounts receivable is $720,000 due from a customer and payable in quarterly instalments of $90,000.The last payment is due December 29, 2012.
 The balance in the Future Income Tax Liability account pertains to a temporary difference that arose in a prior year, of which $30,000 is classified as a current liability.
 During the year, estimated tax payments of $465,000 were charged to income tax expense.
The current and future tax rate on all types of income is 35 percent.In Terracota's December 31, 2010 balance sheet,
-The current assets total is
A)$5,955,000. 
B)$5,595,000. 
C)$3,060,000. 
D)$4,495,000.

Quizplus · Accepted Answer

To determine the current assets total, we need to look at the trial balance and adjust for the accounts receivable due in quarterly instalments. 
Accounts Receivable: $1,080,000 (includes $720,000 due in instalments) 
Prepaid Rent: $90,000 
Inventory: $1,800,000 
Cash: $1,725,000 
Total Current Assets: $5,595,000

Use the Following Information for Questions