Reference no: EM132723713
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.
Problem 1: 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