Question

 

Reporting liabilities

At December 31, MediStat Precision Instruments owes $52,000 on Accounts

Payable, Salaries Payable of $12,000, and Income Tax Payable of $10,000. MediStat

also has $300,000 of Bonds Payable that were issued at face value that require

payment of a $35,000 installment next year and the remainder in later years. The

bonds payable require an annual interest payment of $4,000, and MediStat still

owes this interest for the current year. Report MediStat’s liabilities on its classified

balance sheet on December 31, 2018.

Answer 1

 

Step 1: Definition of current liabilities

The current liabilities are those liabilities that become due within 12 months.

Step 2: Calculation of the total liabilities

Medi Stat Precision
Balance Sheet
At December 31
Current Liabilities:
Accounts Payable	$52,000
Current Portion of bonds Payable	$35,000
Salaries Payable	$12,000
Income Taxes Payable	$10,000
Interest Payable	$4,000
Total Current Liabilities		$113,000
Long Term Liabilities:
Bonds Payable	$265,000
Total Long-term liabilities		$265,000
Total Liabilities		$378,000

 

 

The total liabilities of the company are $378,000.