Question Details

Prepare the current liability section of Howell Company's statement 



Ex. 1
Howell Company has the following selected accounts after posting adjusting entries:
Accounts Payable	€  55,000
Notes Payable, 3-month	80,000
Accumulated Depreciation—Equipment	14,000
Salary Payable	27,000
Notes Payable, 5-year, 8%	30,000
Estimated Warranty Liability	34,000
Salary Expense	6,000
Interest Payable	3,000
Mortgage Payable	200,000
Sales Tax Payable	21,000

Instructions
(a)	Prepare the current liability section of Howell Company's statement of financial position, assuming $25,000 of the mortgage is payable next year. (List liabilities in magnitude order, with largest first.)
(b)	Comment on Howell 's liquidity, assuming total current assets are €450,000.

Ex. 2
Prepare the necessary journal entries for the following transactions:
(a)	On September 1, Cole Company borrowed $150,000 from National Bank on a 6-month, 8% note.
(b)	On December 31, Cole Company accrued interest (assume adjusting entries are only made at the end of the year).



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