Exercise-1 (Current assets section of the balance sheet)

By: Rashid Javed | Updated on: July 12th, 2023

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

Required:

Prepare current assets section of the balance sheet of Husnain company.

Solution:

exercise-1-icm-img1

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’.

One Comment on Exercise-1 (Current assets section of the balance sheet)
  1. Israel

    Interesting

Leave a comment