Question

Exercise 10-15

Larkspur, Inc. reports the following liabilities (in thousands) on its January 31, 2017, balance sheet and notes to the financial statements.

Accounts payable $5,006.0 Mortgage payable $7,033.0
Accrued pension liability 1,558.0 Operating leases 2,258.0
Unearned rent revenue 1,394.0 Notes payable (due in 2020) 347.0
Bonds payable 2,214.0 Salaries and wages payable 573.0
Current portion of mortgage payable 2,045.0 Notes payable (due in 2018) 2,724.0
Income taxes payable 304.0 Unused operating line of credit 3,914.0
Warranty liability—current 1,825.0

Identify which of the above liabilities are likely current and which are likely long-term.

Account
Classification
Accounts payable
select a Classification

Long-term Liability
Not Applicable
Current Liability

Accrued pension liability
select a Classification

Current Liability
Long-term Liability
Not Applicable

Unearned rent revenue
select a Classification

Current Liability
Long-term Liability
Not Applicable

Bonds payable
select a Classification

Long-term Liability
Not Applicable
Current Liability

Current portion of mortgage payable
select a Classification

Current Liability
Not Applicable
Long-term Liability

Income taxes payable
select a Classification

Not Applicable
Long-term Liability
Current Liability

Mortgage payable
select a Classification

Not Applicable
Long-term Liability
Current Liability

Operating leases
select a Classification

Current Liability
Long-term Liability
Not Applicable

Notes payable (due in 2020)
select a Classification

Current Liability
Long-term Liability
Not Applicable

Salaries and wages payable
select a Classification

Not Applicable
Current Liability
Long-term Liability

Notes payable (due in 2018)
select a Classification

Long-term Liability
Not Applicable
Current Liability

Unused operating line of credit
select a Classification

Not Applicable
Long-term Liability
Current Liability

Warranty liability—current
select a Classification

Current Liability
Long-term Liability
Not Applicable

SHOW SOLUTION
LINK TO TEXT

Prepare the liabilities section of Larkspur’s balance sheet as at January 31, 2017.

LARKSPUR, INC.
Balance Sheet (Partial)
choose the accounting period

For the Year Ended January 31, 2017
For the Month Ended January 31, 2017
January 31, 2017
(in thousands)
select an opening name for subsection one

Current Assets
Current Liabilities
Intangible Assets
Long-term Investments
Long-term Liabilities
Property, Plant and Equipment
Stockholders' Equity
Total Assets
Total Current Assets
Total Current Liabilities
Total Intangible Assets
Total Liabilities
Total Liabilities and Stockholders' Equity
Total Long-term Investments
Total Long-term Liabilities
Total Property, Plant and Equipment
Total Stockholders' Equity
enter a balance sheet item
$enter a dollar amount
enter a balance sheet item
enter a dollar amount
enter a balance sheet item
enter a dollar amount
enter a balance sheet item
enter a dollar amount
enter a balance sheet item
enter a dollar amount
enter a balance sheet item
enter a dollar amount
enter a balance sheet item
enter a dollar amount
select a closing name for subsection one
    
Current Assets    
Current Liabilities    
Intangible Assets    
Long-term Investments    
Long-term Liabilities    
Property, Plant and Equipment    
Stockholders' Equity    
Total Assets    
Total Current Assets    
Total Current Liabilities    
Total Intangible Assets    
Total Liabilities    
Total Liabilities and Stockholders' Equity    
Total Long-term Investments    
Total Long-term Liabilities    
Total Property, Plant and Equipment    
Total Stockholders' Equity    
$enter a total amount for subsection one
select an opening name for subsection two

Current Assets
Current Liabilities
Intangible Assets
Long-term Investments
Long-term Liabilities
Property, Plant and Equipment
Stockholders' Equity
Total Assets
Total Current Assets
Total Current Liabilities
Total Intangible Assets
Total Liabilities
Total Liabilities and Stockholders' Equity
Total Long-term Investments
Total Long-term Liabilities
Total Property, Plant and Equipment
Total Stockholders' Equity
enter a balance sheet item
$enter a dollar amount
enter a balance sheet item
enter a dollar amount
enter a balance sheet item
enter a dollar amount
enter a balance sheet item
enter a dollar amount
select a closing name for subsection two
    
Current Assets    
Current Liabilities    
Intangible Assets    
Long-term Investments    
Long-term Liabilities    
Property, Plant and Equipment    
Stockholders' Equity    
Total Assets    
Total Current Assets    
Total Current Liabilities    
Total Intangible Assets    
Total Liabilities    
Total Liabilities and Stockholders' Equity    
Total Long-term Investments    
Total Long-term Liabilities    
Total Property, Plant and Equipment    
Total Stockholders' Equity    
enter a total amount for subsection two
select a closing section name

Current Assets
Current Liabilities
Intangible Assets
Long-term Investments
Long-term Liabilities
Property, Plant and Equipment
Stockholders' Equity
Total Assets
Total Current Assets
Total Current Liabilities
Total Intangible Assets
Total Liabilities
Total Liabilities and Stockholders' Equity
Total Long-term Investments
Total Long-term Liabilities
Total Property, Plant and Equipment
Total Stockholders' Equity

Answer 1

Solution:-

a. Identify which of the above liabilities are likely current and which are likely long-term:-

Account	Classification
Accounts payable	Current liability
Accrued pension liability	Long-term liability
Unearned rent revenue	Current liability
Bonds payable	Long-term liability
Current portion of mortgage payable	Current liability
Income taxes payable	Current liability
Mortgage payable	Long-term liability
Operating leases	Not applicable
Notes payable (due in 2020)	Long-term liability
Salaries and wages payable	Current liability
Notes payable (due in 2018)	Current liability
Unused operating line of credit	Not applicable
Warranty liability—current	Current liability

b. Prepare the liabilities section of Larkspur’s balance sheet as at January 31, 2017:-

Larkspur, Inc.
Balance Sheet (Partial)
January 31, 2017
(in thousands)
Current liabilities
Notes payable (due in 2018)	2,724.0
Accounts payable	5,006.0
Unearned rent revenue	1,394.0
Income taxes payable	304.0
Salaries and wages payable	573.0
Current portion of mortgage payable	2,045.0
Warranty liability—current	1,825.0
Total current liabilities		13,871
Long-term Liabilities
Bonds payable	2,214.0
Mortgage payable	7,033.0
Notes payable (due in 2020)	347.0
Accrued pension liability	1,558.0
Total long-term liabilities		11,152
Total liabilities		25,023