Question

janson corporation company's trial balance included the following account balances on december 31, 2024: accounts receivable $ 12,300 inventory 40,000 patent 13,200 investments 30,800 prepaid insurance 7,100 notes receivable, due 2027 51,100 investments consist of treasury bills that were purchased in november, 2024, and mature in january, 2025. prepaid insurance is for the next 24 months. what amount should be included in the current assets section of janson's december 31, 2024, balance sheet?

Answer 1

The current assets of Janson Corporation on its December 31, 2024, balance sheet should include accounts receivable, inventory, treasury bills, and the portion of prepaid insurance for one year, totaling $86,650.

Step-by-step explanation:

The amount that should be included in the current assets section of Janson Corporation Company's December 31, 2024, balance sheet can be totaled by adding up the values of assets that can be converted to cash within one year. Current assets typically include cash and cash equivalents, accounts receivable, inventory, marketable securities, and prepaid expenses that will be utilized within a year.

To calculate the current assets for Janson Corporation:

Accounts Receivable: $12,300

Inventory: $40,000

Investments (Treasury bills): $30,800 (since they mature in January 2025)

Prepaid Insurance: $7,100 (only the portion for the next 12 months is considered current, so 7,100 / 24 * 12 = $3,550)

Notes Receivable is excluded as it is due in 2027

Adding these figures:

$12,300 (Accounts Receivable) + $40,000 (Inventory) + $30,800 (Investments) + $3,550 (Prepaid Insurance portion for one year) = $86,650. This is the amount that should be classified as current assets on the balance sheet.