O'Rourke Co.reports assigned accounts receivable of $90, 000 that relate to an unpaid note payable of $40, 000.Correct balance sheet disclosure is

A)
Current assets:
Accounts receivable assigned $$90,000\quad\quad\quad \$ 90,000$
Less: Note payable $\quad\quad\quad\quad\quad\quad\quad \underline{40,000}$
Equity in accounts receivable assigned $$50,000\quad \$ 50,000$
B)
Current assets:
Equity in accounts receivable assigned $$50,000\quad\quad\quad \$ 50,000$
C)
Current assets:
Accounts receivable assigned $$90,000\quad\quad \$ 90,000$
Current liabilities:
Note payable $$40,000\quad\quad\quad\quad\quad\quad \$ 40,000$

D)
Current assets:
Accounts receivable assigned $\quad \$ 50,000$
Current liabilities:
Note payable $$50,000\quad\quad\quad\quad\quad\quad \$ 50,000$
Less: Accounts receivable assigned $50,000$−0−\quad\quad\quad \frac{50,000}{\$-0-}$

Question

O'Rourke Co.reports assigned accounts receivable of $90, 000 that relate to an unpaid note payable of $40, 000.Correct balance sheet disclosure is

A)
Current assets:
Accounts receivable assigned

$90,000\quad\quad\quad \$ 90,000

Less: Note payable

\quad\quad\quad\quad\quad\quad\quad \underline{40,000}

Equity in accounts receivable assigned

$50,000\quad \$ 50,000

B)
Current assets:
Equity in accounts receivable assigned

$50,000\quad\quad\quad \$ 50,000

C)
Current assets:
Accounts receivable assigned

$90,000\quad\quad \$ 90,000

Current liabilities:
Note payable

$40,000\quad\quad\quad\quad\quad\quad \$ 40,000

D)
Current assets:
Accounts receivable assigned

\quad \$ 50,000

Current liabilities:
Note payable

$50,000\quad\quad\quad\quad\quad\quad \$ 50,000

Less: Accounts receivable assigned

50,000$−0−\quad\quad\quad \frac{50,000}{\$-0-}

Brigith Flores · Accepted Answer

Final Answer : C, Explanation :  The correct balance sheet disclosure separates the full amount of the assigned accounts receivable ($90,000) under current assets and the note payable ($40,000) under current liabilities, without netting the two against each other. This approach maintains the clarity of the financial position by showing both the asset and the liability separately.

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