Mill Co.’s trial balance included the following account balances at December 31, 2010:
Accounts Payable $15,000
Bonds Payable, due 2011 25,000
Discount on Bonds Payable, due 2011 3,000
Dividends Payable, 1/31/11 8,000
Notes Payable, due 2012 20,000
What amount should be included in the current liabilities section of Mill’s December 31, 2010, balance sheet? (6 points) Show computations to earn extra 4 points!
A. $45,000
B. $51,000
C. $65,000
D. $78,000
Accounts Payable $15,000 Add: Bonds Payable 25,000 Less: Discount on Bonds Payable (3,000) Add: Dividends Payable 8,000 Current Liabilities $45,000
A. $45,000
Accounts Payable $ 15,000
Bonds Payable $ 25,000
Discount on Bonds Payable $ (3,000)
Dividends Payable $ 8,000
Total Current Liabilities $ 45,000
A. $45,000 Solution: Current Liabilities (Due 2011) Acc. Payable = $15,000 Add: Bonds Payable = $25,000
Dividends Payable = $ 8,000 Less: Discount on Bonds Payable = ($ 3,000)
A. $45,000 (=+$15,000+$25,000-$3,000+$8,000)