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Problem 10.8 B

# Problem 10.8 B - current B Items have been...

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Problem 10.8B Liabilities Current liabilities Note payable \$ 20,000 Current accrued interest (bond) \$ 22,500 Cash deposits (Unearned revenue) \$ 268,000 Income tax payable \$ 145,000 Total current liabilities \$ 455,500 Non – current liabilities: Note payable (1) \$ 220,000 Bond payable \$ 750,000 Income tax payable (2) \$ 115,000 Total non – current liabilities \$ 1,085,000 Total liabilities \$1,540,500 (1): Non – current note payable consists \$ 130,000 (from \$150,000-\$20,000 that is current) and  \$ 90,000 (note payable due within 90 days but expected to be extended for an additional 18  months). (2): Non – current tax income payable consists \$ 115,000 (from \$260,000-\$145,000 that is

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Unformatted text preview: current) B, Items have been excluded:-Interest expense: This interest expense will only be incurred in the next 12 months and not at this point of time. Time has not passed yet thus excluded.-Lawsuit: it is still pending with an uncertain outcome. In addition, the cost of this lawsuit cannot be reasonably estimated at this point of time. -Salary: The contract for future transaction is commitment. It is not liabilities, but if material, it is disclosed in note to the financial statements. There is no obligation to make payments until the services are received....
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Problem 10.8 B - current B Items have been...

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