Question

A list of financial statement items for Wildhorse Co. Includes the following accounts receivable $21,700, prepaid insurance $4,030; cash $16,120 supplies $5,890; and debt Investments (short-term) $12,710. Prepare the current assets section of the balance sheet listing the items in the proper sequence.

Answer 1

The current assets section of the balance sheet for Wildhorse Co. should be listed in order of liquidity.

Step-by-step explanation:

The current assets section of the balance sheet lists assets that are expected to be converted into cash or used up within one year or the operating cycle of the business, whichever is longer. The proper sequence for listing current assets is usually in order of liquidity, meaning the assets that are easiest to convert into cash should be listed first.

Based on the information provided, the current assets section of the balance sheet for Wildhorse Co. would be listed as follows:

1. Cash: $16,120
2. Accounts Receivable: $21,700
3. Debt Investments (short-term): $12,710
4. Prepaid Insurance: $4,030
5. Supplies: $5,890