Question

Pronghorn Corporation has the following accounts included in its December 31, 2025, trial balance: Accounts Receivable $119,000, Inventory $297,500, Allowance for Doubtful Accounts $9,510, Patents $73,900, Prepaid Insurance $9,800, Accounts Payable $77,900, and Cash $30,600. Prepare the current assets section of the balance sheet. (List current assets in order of liquidity.)

Answer 1

The current assets section of Pronghorn Corporation's balance sheet is prepared by listing current assets in order of liquidity, from cash to prepaid insurance.

Step-by-step explanation:

The current assets section of the balance sheet for Pronghorn Corporation is prepared by listing current assets in order of liquidity. Liquidity refers to how quickly an asset can be converted into cash without a significant loss in value. In this case, the current assets of Pronghorn Corporation include:

1. Cash - $30,600
2. Accounts Receivable - $119,000
3. Inventory - $297,500
4. Prepaid Insurance - $9,800

These assets are listed in order of their liquidity, with cash being the most liquid asset.