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Exercise 1-39 Current Assets and Current Liabilities Hanson Construction has an operating cycle of '5' months. On December 31. 2019, Hanson has the following assets and liabilities: A note receivable in the amount of $1500 10 be collected in 6 months Cash totaling $1,380 Accounts payable totaling $2,100, all of which will be paid within 2 months Accounts receivable totaling $12,000, including an account for $7,000 that will be paid in 2 months and an account for $5,000 that will be paid in 18 months Construction supplies coming $6,200, all of which will be used in construction within the next 12 months Construction equipment costing $60,000 on which depreciation of $22,400 has accumulated A note payable to the bank in the amount of $6,800 is to be paid within the next year Required: Calculate the amounts of current assets and current liabilities reported on Hanson’s balance sheet at December 31, 2019. CONCEPTUAL CONNECTION Comment on Hanson’s liquidity.

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881
BuyFind

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881

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Chapter
Section
Chapter 1, Problem 39E
Textbook Problem

Exercise 1-39 Current Assets and Current Liabilities

Hanson Construction has an operating cycle of '5' months. On December 31. 2019, Hanson has the following assets and liabilities:

  1. A note receivable in the amount of $1500 10 be collected in 6 months
  2. Cash totaling $1,380
  3. Accounts payable totaling $2,100, all of which will be paid within 2 months
  4. Accounts receivable totaling $12,000, including an account for $7,000 that will be paid in 2 months and an account for $5,000 that will be paid in 18 months
  5. Construction supplies coming $6,200, all of which will be used in construction within the next 12 months
  6. Construction equipment costing $60,000 on which depreciation of $22,400 has accumulated
  7. A note payable to the bank in the amount of $6,800 is to be paid within the next year

Required:

  1. Calculate the amounts of current assets and current liabilities reported on Hanson’s balance sheet at December 31, 2019.
  2. CONCEPTUAL CONNECTION Comment on Hanson’s liquidity.

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Chapter 1 Solutions

Cornerstones of Financial Accounting
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