Question

Diane Corporation is preparing its year-end balance sheet. The company records show the following selected amounts at the end of the year: Total assets $ 550,000 Total noncurrent assets 352,000 Liabilities: Notes payable (8%, due in 5 years) 21,000 Accounts payable 51,000 Income taxes payable 14,000 Liability for withholding taxes 4,000 Rent revenue collected in advance 9,000 Bonds payable (due in 15 years) 100,000 Wages payable 9,000 Property taxes payable 5,000 Note payable (10%, due in 6 months) 14,000 Interest payable 600 Common stock 250,000 Required: 1-a. What is the amount of current liabilities

Answer 1

Answer:

Diane Corporation

The amount of current liabilities is:

=  $106,600.

Explanation:

a) Data and Calculations:

Total assets $ 550,000

Total noncurrent assets 352,000

Liabilities: Notes payable (8%, due in 5 years) 21,000

Accounts payable 51,000

Income taxes payable 14,000

Liability for withholding taxes 4,000

Rent revenue collected in advance 9,000

Bonds payable (due in 15 years) 100,000

Wages payable 9,000

Property taxes payable 5,000

Note payable (10%, due in 6 months) 14,000

Interest payable 600

Common stock 250,000

Current liabilities:

Accounts payable                                $51,000

Income taxes payable                           14,000

Liability for withholding taxes                4,000

Rent revenue collected in advance      9,000

Wages payable                                      9,000

Property taxes payable                         5,000

Note payable (10%, due in 6 months) 14,000

Interest payable                                       600

Total current liabilities =                 $106,600

b) Current liabilities represent the debts that Diane owes creditors within the current accounting period.  They have short-term duration or are due to be repaid within the next 12 months.