Question 7 - Intermediate Accounting (Kieso)

Question

BE5-7 (L03) Thomas Corporation’s adjusted trial balance contained the following liability accounts at December 31, 2017: Bonds Payable (due in 3 years) \(100,000, Accounts Payable \)72,000, Notes Payable (due in 90 days) \(22,500, Salaries and Wages Payable \)4,000, and Income Taxes Payable $7,000. Prepare the current liabilities section of the balance sheet.

Step-by-Step Solution

Answer

The current liabilities of the business entity total $105,500.

Definition of Salaries and Wages Payable

Salaries and wages payable are defined as the current liabilities of the business entity reporting the amount of money not paid to the employees for services they rendered in the previous period.

Current Liabilities Section

Particular	Amount $
Accounts Payable	$72,000
Note payable (due in 90 days)	22,500
Salaries and wages payable	4,000
Income tax payable	7,000
Total current liabilities	$105,500