Question

Stiner Company has the following selected accounts after posting adjusting entries:

Accounts Payable                                                                $ 45,000

Notes Payable, 3-month                                                          80,000

Accumulated Depreciation—Equipment                                 14,000

Payroll and Benefits Payable                                                  27,000

Notes Payable, 5-year, 8%                                                      30,000

Estimated Warranty Liability                                                    34,000

Payroll Tax Expense                                                                  6,000

Interest Payable                                                                         3,000

Mortgage Payable                                                                 200,000

Sales Tax Payable                                                                   16,000

Instructions

(a)    Prepare the current liability section of Stiner Company's balance sheet, assuming $25,000 of the mortgage is payable next year. (List liabilities in magnitude order, with largest first.)

(b)    Comment on Stiner 's liquidity, assuming total current assets are $450,000.

Answer 1

Ques 1
Stiner company
Current liabilities
Notes payable-3 month	$          80,000
Accounts payable	$          45,000
Estimated warranty liability	$          34,000
Payroll and benefits payable	$          27,000
Current portion of long term debt	$          25,000
Sales tax payable	$          16,000
Interest payable	$            3,000
Total current liabilities	$        230,000
Ques 2
Current ratio=current assets/current liabilities
450000/230000=	1.96	times