Liabilities
Liabilities
Liabilities
Liabilities
are present obligations of an entity to transfer an economic resource as a result of past
events.
1. Current Liabilities
2. Noncurrent Liabilities
Examples:
Accounts payable, including deposits and advances from customer of 250,000 1,250,000
Notes payable, including note payable to bank due on Dec. 31, 2022 of 500,000 1,500,000
Share dividend payable 400,000
Credit balances of in customer’s accounts 200,000
Serial bonds payable in semi-annual installment of 500,000 5,000,000
Accrued interest on bonds payable 150,000
Contested BIR tax assessment – possible obligation 300,000
Unearned rent income 100,000
Accounts payable, including deposits and advances from customer of 250,000 1,250,000
Notes payable, including note payable to bank due on Dec. 31, 2022 of 500,000 1,000,000
Credit balances of in customer’s accounts 200,000
Serial bonds payable in semi-annual installment of 500,000 1,000,000
Accrued interest on bonds payable 150,000
Unearned rent income 100,000
TOTAL CURRENT LIABILITIES 3,700,000
EXAMPLE 2
Gar Company disclosed the ff. liability account balances on Dec. 31, 2020:
On Dec. 31, 2020, what total amount should be reported as current liabilities?
SOLUTION
The 1,000,000 bank loan was refinanced with a 5-year loan on Juan. 15, 2021, with the first principal payment due
Jan. 15, 2022.
The financial statements were issue Feb. 28, 2021.
What total amount should be reported as current liabilities on Dec. 31, 2020?
SOLUTION