The current assets and current liabilities sections of the balance sheet of Sage Company appear as follows. Sage Company Balance Sheet (Partial) December 31, 2025 Cash $44,300 Accounts payable $58,160 Accounts receivable $94,400 Notes payable 66,420 Less: Allowance for doubtful accounts 7,400 87,000 $124,580 Inventory 174,040 Prepaid expenses 9,210 $314,550 The following errors in the corporation's accounting have been discovered: 1. 2. 3. 4. January 2026 cash disbursements entered as of December 2025 included payments of accounts payable in the amount of $39,900, on which a cash discount of 2% was taken. The inventory included $30,450 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $12,920 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30. Sales for the first four days in January 2026 in the amount of $28,760 were entered in the sales journal as of December 31, 2025. Of these, $21,910 were sales on account and the remainder were cash sales. Cash, not including cash sales, collected in January 2026 and entered as of December 31, 2025, totaled $33,168. Of this amount, $21,168 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan. (a) Your answer is partially correct. Restate the current assets and current liabilities sections of the balance sheet in accordance with good accounting practice. (Assume that both accounts receivable and accounts payable are recorded gross.) (List Current Assets in order of liquidity.) Sage Company Balance Sheet (Partial) Current Assets Cash Accounts Receivable December 31, 2025 Asset Less : Allowance for Doubtful Accounts Inventory Prepaid Expenses Total Current Assets Current Liabilities Accounts Payable Notes Payable Total Current Liabilities eTextbook and Media eTextbook $ 94400 Liabilities and Stockholders' Equity 7400 14 69 Assistance Used