Question

Barsky Corp. has the following items: Cash $5,000, Prepaid expenses $2,000, Building $40,000, Land $20,000, Inventory $15,000. What is the total noncurrent assets on the balance sheet?

Answer 1

The total noncurrent assets on the balance sheet of Barsky Corp. are calculated by adding the value of the Building ($40,000) and the Land ($20,000), which equals $60,000.

Step-by-step explanation:

To determine the total noncurrent assets on the balance sheet of Barsky Corp., we must first categorize each item as either a current or noncurrent asset. Noncurrent assets typically include long-term investments, property (such as buildings and land), and equipment that are used in operating activities but is not converted into cash within a single year of the balance sheet date.

Examining the items, Cash and Prepaid expenses are classified as current assets and thus are not included in the calculation for noncurrent assets. The Building (worth $40,000) and Land (worth $20,000) are considered noncurrent as they are long-term in nature. Therefore, the total noncurrent assets are $60,000 (Building + Land).