IDENTIFYING CURRENT ASSETS AND LIABILITIES. Dunn Sporting Goods sells athletic clothing and footwear to retail customers. Dunn’s accountant indicates that the firm’s operating cycle averages 6 months. At December 31, 19x3, Dunn has the following assets and liabilities: i

a) Prepaid rent in the amount of $16,000. Dunn’s rent is $500 per month.

b) A $3,100 account payable due in 45 days.

c) Inventory in the amount of $44,230. Dunn expects to sell $38,000 of the inventory within 3 months. The remainder will be placed in storage until September 19x4.

The items placed in storage should be sold by November 19x4.

d) An investment in marketable securities in the amount of $1,900. Dunn expects to sell $700 of the marketable securities in 6 months. The remainder is not expected to be sold until 19x6.

e) Cash in the amount of $350.

f) An equipment loan in the amount of $6,000, of which $1,000 is due in 3 months.

The next $1,000 payment is due in March 19x5. Interest of $600 is also due with the $1,000 payment due in 3 months.

g) An account receivable from a local university in the amount of $2,850. The university has promised to pay the full amount in 3 months.

h) Store equipment at a cost of $8,500. Accumulated depreciation has been recorded on the store equipment in the amount of $1,250.

REQUIRED:

Prepare the current asset and current liability portions of Dunn’s December 31, 19x38, balance sheet. L-1