Final answer:
The total dollar amount of current assets for Wildhorse Co. is $603,500, calculated by summing up the cash, accounts receivable, inventory, and prepaid insurance.
Step-by-step explanation:
To determine the total dollar amount of current assets for Wildhorse Co., it is necessary to identify which assets on the balance sheet are likely to be converted to cash, sold, or consumed within one year or the operating cycle, whichever is longer. These typically include cash, accounts receivable, inventory, and prepaid expenses. In contrast, long-term investments, land, buildings (net of depreciation), and intangible assets like goodwill are not considered current assets as they are not expected to be liquidated within a year.
Based on the information provided in the balance sheet, the current assets are:
- Cash: $200,000
- Accounts receivable: $155,000
- Inventory: $160,000
- Prepaid insurance: $88,500
By adding these amounts together, we can calculate the total current assets:
$200,000 (cash) + $155,000 (accounts receivable) + $160,000 (inventory) + $88,500 (prepaid insurance) = $603,500
Therefore, the total dollar amount of current assets to be classified for Wildhorse Co. is $603,500.