Janson Corporation Co.'s trial balance included the following account balances at December 31, 2013: Investments consist of treasury bills that were purchased in November and mature in January. Prepaid insurance is for the next two years. What amount should be included in the current asset section of Janson's December 31, 2013, balance sheet?

Question

Janson Corporation Co.'s trial balance included the following account balances at December 31, 2013:  Investments consist of treasury bills that were purchased in November and mature in January. Prepaid insurance is for the next two years. What amount should be included in the current asset section of Janson's December 31, 2013, balance sheet?

Quizplus · Accepted Answer

Treasury bills that were purchased in November and mature in January are considered short-term investments and should be included in the current asset section of the balance sheet. Therefore, the $3,000 investment should be added to the current asset section. Prepaid insurance should also be included in the current asset section since it hasn't been used yet. The amount of prepaid insurance is not provided in the question, so we cannot consider it when calculating the current asset section. Therefore, the total current assets of Janson Corporation Co. as of December 31, 2013, should be $85,000 ($82,000 + $3,000).