Question

At the beginning of April, Warren Corporation's assets totaled $254,000 and liabilities totaled $74,000. During April the following summarized transactions occurred: Additional shares of stock were sold for $27,000 cash. A building costing $109,000 was purchased using $17,000 cash and by signing an $92,000 long-term note payable. Short-term investments costing $10,400 were purchased using cash. $11,400 was paid to an employee as a loan; the employee signed a six-month note in exchange for the loan. How much are Warren's total liabilities at the end of April?

Answer 1

Answer:

The total liabilities is $166,000

Explanation:

The computation of the total liabilities is shown below:

=  Beginning balance of liabilities + long term note payable

= $74,000 + $92,000

= $166,000

The total liabilities include both types of liabilities which includes current as well as long term liabilities. The current liabilities are those whose period is less than one year whereas the long term liabilities are those who have a life of more than one year.