Question

 

Definition:  Reporting liabilities on the balance sheet and computing debt to

equity ratio

The accounting records of Pack Leader Wireless include the following as of

December 31, 2018:

Accounts Payable $ 77,000 Salaries Payable $ 7,500

Mortgages Payable (long-term) 73,000 Bonds Payable (current portion) 25,000

Interest Payable 18,000 Premium on Bonds Payable 10,000

Bonds Payable (long-term) 63,000 Unearned Revenue (short-term) 2,700

Total Stockholders’ Equity 140,000

Requirements

1. Report these liabilities on the Pack Leader Wireless balance sheet, including headings and totals for current liabilities and long-term liabilities.

 

Answer 1

 

Step 1: Definition of the salaries payable

The salaries payable are those salaries that are due not paid.

Step 2: Balance Sheet

Pack Leader Wireless
Balance Sheet
As of December 31, 2018
Current Liabilities:
Accounts Payable	$77,000
Salaries Payable	$7,500
Bonds Payable (Current Portion)	$25,000
Interest Payable	$18,000
Unearned Revenue	$2,700
Total Current Liabilities		$130,200
Long-term Liabilities:
Bonds Payable	$63,000
Add: Premium on Bonds Payable	$10,000
Shareholder’s Equity	$140,000
Total Long-term Liabilities		$213,000
Total Liabilities		$343,200

 

 

The total of the liabilities side is $343, 200.