The trial balance of Hussnain Manufacturing Company shows the following assets at the end of December 2022:
- Cash: $380,000
- Prepaid insurance: $82,000
- Raw materials: $670,000
- Equipment: $2,200,000
- Accounts receivable: $800,000
- Work-in-process (WIP): $400,000
- Finished goods: $150,000
- Patents: $220,000
Prepare current assets section of the balance sheet of Husnain company.
Notice that Hussnain manufacturing company reports three inventories (finished goods inventory, work-in-process inventory and raw materials inventory) in the current assets section of the balance sheet.
Merchandising companies report only one inventory that is ‘merchandising inventory’.