Question

E10-15 Sanchez, Inc. reports the following liabilities (in thousands) on its December 31, 2017, balance sheet and notes to the financial statements. Prepare liabilities section of balance sheet. Accounts payable Accrued pension liability Unearned rent revenue Bonds payable Current portion of $4,263.9 Mortgage payable $6,746.7 (LO 4), AP 1,115.2 1,058.1 1,961.2 Operating leases Notes payable (due in 2020) Salaries and wages payable Notes payable (due in 2018)2,563.6 1,641.7 335.6 858.1 mortgage payable Income taxes payable 1,992.2 Unused operating line of credit 3,337.6 1,417.3 265.2 Warranty liability-current Instructions (a) Identify which of the above liabilities are likely current and which are likely long-term. List any items that do not fit in either category. Explain the reasoning for your selection. Prepare the liabilities section of Sanchez's balance sheet as at December 31, 2017. (b)

Answer 1

Ques A:

a.     Accounts Payable

i.    Current liability

1.     Due within 1 year

b.    Accrued pension liability

i.    Long-term Liability

1.     Not due within 1 year

c.     Unearned rent revenue

i.    Current liability

1.     Due within 1 year

d.    Bonds payable

i.    Long-term Liability

1.     Not due within 1 year

e.     Current portion of mortgage payable

i.    Current liability

1.     Due within 1 year

f.     Income taxed payable

i.    Current liability

1.     Due within 1 year

g.    Mortgage payable

i.    Long-term Liability

1.     Not due within 1 year

h.     Operating leases

i.    Not on balance sheet

i.      Notes payable (due 2020)

i.    Long-term Liability

1.     Not due within 1 year

j.      Salaries and wages

i.    Current liability

1.     Due within 1 year

k.     Notes payable (due in 2018)

i.    Current Liability

1.     Due in 1 year

l.      Unused operating line of credit

i.    Not on balance sheet

m.   Warranty liability – current

i.    Current Liability

1.     Depends on length of warranty, current.

Ques B:

Sanchez Inc
Balance sheet(Partial)
dec 31 2017
Current liabilities
Notes payable	$2,563.60
Accounts payable	4,263.90
Current portion of mortgage payable	1,992.20
Warranty liability	1,417.30
Unearned rent revenue	1,058.10
Salaries and wages payable	858.1
Income taxes payable	265.2
Total current liabilities		$12,418.40
Long-term liabilities
Mortgage payable	$6,746.70
Bonds payable	1,961.20
Accrued pension liability	1,115.20
Notes payable	335.6
Total long-term liabilities		10,158.70
Total liabilities		$22,577.10