Clear Co s trial balance has the following selected accounts

Clear Co \'s trial balance has the following selected accounts Cash (includes $10,000 in bond-sinking fund for long-term bond payable) $50,000 Accounts receivable Allowance for doubtful accounts Deposits received from customers Merchandise inventory Unearned rent Investment in trading debt securities 20,000 5,000 3,000 7,000 1,000 2,000 What amount should Clear report as total current assets in its balance sheet?

Solution

Cash (50000-10000) 40,000
Accounts Receivable 20,000
less-Allowance for doubtful debts - 5,000
Deposits from customers 3,000
Merchandise Inventory 7,000
Unearned rent 1,000
Investment in trading debt securities 2,000
Total Current Assets 68,000

Note: Even though bond sinking funds are available as cash, such funds are used to repay long term bonds (i.e long term liabilities and not current liabilities). Hence, these are classified under long-term assets.