Current Liabilities and Payroll Accounting

Younger Online Company has the following liability accounts after posting adjusting entries: Accounts Payable $73,000, Unearned Ticket Revenue $24,000, Warranty Liability $18,000, Interest Payable $8,000, Mortgage Payable $120,000, Notes Payable $80,000, and Sales Taxes Payable $10,000. Assume the company's operating cycle is less than 1 year ticket revenue will be recognized within 1 year; warranty costs are expected to be incurred within 1 year, and the notes mature in 3 years.

Instructions

  1. Prepare the current liabilities section of the balance sheet, assuming $30,000 of the mortgage is payable next year.
  2. Comment on Younger Online Company's liquidity6, assuming total current assets are $300,000.

Solution

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