Answer
Current Assets
Accounts receivable—Trade (of which accounts in the amount of
$75,000 have been assigned as security for loans payable)
(523,000 + 75,000) …………………………………………………………………........…………...598,000
Federal income tax refund receivable ……………………………………………………………15,500
Advance payments on purchases ………………………………………………….………………61,000
Investments
Advance to subsidiary………………………………………………………………........…………….. 45,500
Other Assets
Travel advance to employee ……………………………………………....………………………….22,000
Notes receivable past due plus accrued interest ……………………………………………27,000
Work Step by Step
Different acceptable solutions are possible depending upon the assumptions made as to whether certain items are collectible within the operating cycle or not. The calculation above illustrates one possibility:
