Question

A list of financial statement items for Sunland Company includes the following: accounts receivable $19,600; prepaid insurance $3,640; cash $14,560; supplies $5,320; and debt investments (short-term) $11,480.

Prepare the current assets section of the balance sheet listing the items in the proper sequence. (List current assets in order of liquidity.)

Answer 1

The current assets section of the balance sheet for Sunland Company, listed in order of liquidity, includes cash, accounts receivable, prepaid insurance, debt investments (short-term), and supplies.

Step-by-step explanation:

The current assets section of the balance sheet lists assets in order of liquidity. Liquidity refers to the ease with which an asset can be converted into cash. In this case, the current assets for Sunland Company would be listed as follows:

1. Cash: $14,560
2. Accounts Receivable: $19,600
3. Prepaid Insurance: $3,640
4. Debt Investments (Short-term): $11,480
5. Supplies: $5,320