Question

Retained earnings $52,000 Accounts Payable $15,000 Supplies 37,000 Common stock 25,000 Equipment 72,000 Note payable (due in 18 months) 35,000 Accounts Receivable 8,600 Interest payable 7,000 Unearned revenue 6,000 Cash 22,400 What is the amount of current liabilities?

Answer 1

Answer:

$22,000

Explanation:

Current liabilities are debts that a company must pay within a twelve month period.

This company's current liabilities are:

• Accounts payable  $15,000
• Interest payable  $7,000

Total current liabilities = $15,000 + $7,000 = $22,000

Since the note payable is due in 18 months, it is not considered a current liability.