Question

Aster Inc. has the following balances for the year ended December 31, 2014: Items Amount $ Goodwill 10,000 Plant and Machinery 50,000 Inventory 30,000 Cash at bank 7,000 Prepaid Rent 3,000 What is the total current assets of Aster as of December 31, 2014? A. $40,000 B. $90,000 C. $80,000 D. $100,000

Answer 1

The total current assets of Aster Inc. as of December 31, 2014, are the sum of Cash at bank, Inventory, and Prepaid Rent, which amounts to $40,000. Hence, the correct answer is A. $40,000.

Step-by-step explanation:

The total current assets of Aster Inc. as of December 31, 2014, can be determined by adding up all the assets that can be converted into cash within a year. Current assets typically include cash and cash equivalents, accounts receivable, inventory, marketable securities, and prepaid expenses. For Aster Inc., the current assets would be the sum of Cash at bank, Inventory, and Prepaid Rent.

To calculate the total current assets, we use the following figures:

• Cash at bank: $7,000
• Inventory: $30,000
• Prepaid Rent: $3,000

Adding these amounts together gives us:
$7,000 (Cash at bank) + $30,000 (Inventory) + $3,000 (Prepaid Rent) = $40,000 in current assets.

Therefore, the correct answer is A. $40,000.