Reference no: EM132691903

Question - The following accounts were taken from the unadjusted trial balance of TOMMY Corporation on December 31, 2020:

Accounts payable 877,000

Accounts receivable 808,000

Accrued expenses 340,000

Accrued interest payable 30,000

Allowance for doubtful accounts 15,000

Cash and cash equivalents 209,000

Dividends payable 25,000

Income tax payable 52,000

Trading securities at cost 143,000

Notes receivable 100, 000

Merchandise Inventory 796,000

Prepaid expenses 100,000

Accumulated profits 40, 000

Contingent liabilities 527,000

Bonds payable, 6% (50,000 due Sept 30 annually) 500, 000

Additional Information:

The accounts receivable balance is net of customers' deposit of $40,000.

The market value of the trading securities is $150,000.

The balance of the notes receivable includes $80,000 of note discounted for which the company is contingently liable.

In 2020, the company began using the average cost method of valuing the inventory. Prior to 2020, the FIFO method was used. The value of the inventory if the FIFO method was used would be $815,000.

Required - How much should TOMMY Corporation report as current assets on December 31, 2020?

a) $1,930,000

b) $1,971,000

c) $1,931,000

d) $2,018,000