Question

At December 31, MediSharp Precision Instruments owes $58,000 on Accounts Payable, Salaries Payable of $14,000, and Income Tax Payable of $8,000. MediSharp also has $240,000 of Bonds Payable that were issued at face value that require payment of a $45,000 installment next year and the remainder in later years. The bonds payable require an annual interest payment of $7,000, and MediSharp still owes this interest for the current year. Report MediSharp's liabilities on its classified balance sheet on December 31,2024 . (Check your spelling carefully and do not abbreviate. When applicable, use only the account names given in the problem statement.) Balance Sheet (Partial) December 31, 2024

Answer 1

MediSharp Precision Instruments will report total current liabilities of $132,000 and long-term liabilities of $195,000 on its balance sheet for December 31, 2024.

Step-by-step explanation:

On December 31, MediSharp Precision Instruments will report its liabilities on the classified balance sheet as follows:

• Current Liabilities:
  
  • Accounts Payable - $58,000
  • Salaries Payable - $14,000
  • Income Tax Payable - $8,000
  • Interest Payable - $7,000
  • Current Portion of Bonds Payable - $45,000
• Long-Term Liabilities:
  
  • Bonds Payable (less current portion) - $195,000

The total current liabilities amount to $132,000 ($58,000 + $14,000 + $8,000 + $7,000 + $45,000). The long-term portion of the bonds payable is calculated by subtracting the current portion ($45,000) from the total bonds payable ($240,000), resulting in $195,000. Therefore, the long-term liabilities consist only of the long-term portion of the bonds payable.

Answer 2

Here's the classified balance sheet for MediSharp Precision Instruments on December 31, 2024:

Current Liabilities:

Accounts Payable: $58,000

Salaries Payable: $14,000

Income Tax Payable: $8,000

Current Portion of Bonds Payable: $45,000

Accrued Interest Payable: $7,000

Total Current Liabilities: $132,000

Non-Current Liabilities:

Bonds Payable: $195,000

Total Non-Current Liabilities: $195,000

Total Liabilities: $327,000