14. Use the information below for Privett Company to answer the question that fo

Question

14.

Use the information below for Privett Company to answer the question that follow.

Based on the data for Privett Company, what is the amount of quick assets?

a. $168,000

b. $60,000

c. $96,000

d. $61,000

Privett Company Accounts payable $ 30,000 Accounts receivable 35,000 Accrued liabilities 7,000 Cash 25,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 100,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 20,000 Property, plant, and equipment 400,000 Prepaid expenses 2,000

Explanation / Answer

The correct option is C.$ 96000

Accounts receivable + Cash+ marketable securities

$35000+ $25000+ $36000= $96000

Quick assets are those assets which are converted in to cash quickly. Quick assets includes Accounts receivable, cash and marketable securities. Here is main thing to note that inventory and prepaid expenses are not part of quick assets. Inventory and prepaid expenses are part of current assets. Inventory and prepaid expenses are not very liquid like accounts receivable and marketable securities . So they are not included in quick assets.

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