PROBLEM

Following selected accounts and additional information are taken from MIYANA Corporation at December 31, 2018:

Cash 150,000;

Accounts receivable 2,100,000;

Inventories 1,600,000;

Accounts payable 550,000;

12% notes payable 800,000;

Employees income taxes payable 6,500.

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**The 2,100,000 balance in accounts receivable represents the entire amount owed to the company; of this amount, 500,000 represents a long-term advance to its president. The remaining amount is from trade customers and 5% of that amount is estimated to be uncollectible.

** Inventories (taken by physical count) include 200,000 of goods which is not belonging to MIYANA. As of December 31, 2018,the goods are still in transit. Office supplies on hand of 50,000 are also included in the balance.

**The accounts payable balance includes a suppliers invoice for95,000 received through facsimile message representing goods shipped FOB destination and are still in transit at yearend.

**The 12% interest-bearing note is dated June 1, 2018 and matures May 31, 2019. Accrued interest on the note has not been recorded.

QUESTIONS:

1. How much is the total current assets at December 31, 2018? A. 3,150,000 B. 3,100,000 C. 3,070,000 D. 3,020,000

2. How much is the total current liabilities at December 31, 2018? A. 1,452,500 B. 1,412,500 C. 1,357,500 D. 1,317,500

CORRECT ANSWERS:

1.) C. 3,070,000

2.) D. 1,317,500

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