Final answer:
The company should report total current assets of $164,250 on December 31, 2022, which includes net accounts receivable, cash, notes receivable including the current portion, prepaid rent, and a short-term certificate of deposit.
Step-by-step explanation:
To calculate the total current assets for the company on December 31, 2022, we need to examine and add up the given items, while considering the additional information provided:
- Accounts receivable = $22,000
- Cash = $30,000
- Notes receivable, net = $90,000 (including a $10,000 principal portion due in 2023, which is a current asset)
- Prepaid rent = $11,250 (covering future months' rent expense)
- The certificate of deposit (CD) = $12,000 (being a temporary investment of cash, it is a current asset given its original maturity of 2 months)
With the allowance for doubtful accounts at $1,000, we need to subtract this from accounts receivable to get the net realizable value of accounts receivable. The monthly rent expense is not directly relevant for calculating current assets; however, it indicates that the prepaid rent covers multiple future periods.
Total current assets would therefore be:
- Accounts receivable ($22,000) - Allowance for doubtful accounts ($1,000) = $21,000
- Plus Cash = $30,000
- Plus Notes receivable, net = $90,000
- Plus Prepaid rent = $11,250
- Plus Certificate of Deposit = $12,000
Summing these up yields: $21,000 (Accounts receivable) + $30,000 (Cash) + $90,000 (Notes receivable) + $11,250 (Prepaid rent) + $12,000 (CD) = $164,250 as the total current assets.