The following information details to KIWI Company as of December 31, 2022Accounts Payable P540,000Unearned rent income 21,000Bonds Payable due on 12/31/2025 4,000,000Accrued interest on bonds payable 30,000Accrued Salaries expense 20,000Notes Payable including note payable to bank 12/31/2022 950,000How much is the current liabilities?Group of answer choices5,101,0001,021,0001,561,0004,000,000
Question
The following information details to KIWI Company as of December 31, 2022Accounts Payable P540,000Unearned rent income 21,000Bonds Payable due on 12/31/2025 4,000,000Accrued interest on bonds payable 30,000Accrued Salaries expense 20,000Notes Payable including note payable to bank 12/31/2022 950,000How much is the current liabilities?Group of answer choices5,101,0001,021,0001,561,0004,000,000
Solution
The current liabilities of a company are the debts or obligations that are due within one year. In the case of KIWI Company, the current liabilities as of December 31, 2022 would include:
- Accounts Payable: P540,000
- Unearned rent income: P21,000
- Accrued interest on bonds payable: P30,000
- Accrued Salaries expense: P20,000
- Notes Payable including note payable to bank 12/31/2022: P950,000
The Bonds Payable due on 12/31/2025 is not considered a current liability because it is not due within one year.
So, to calculate the total current liabilities, you would add up all of the above:
P540,000 (Accounts Payable)
- P21,000 (Unearned rent income)
- P30,000 (Accrued interest on bonds payable)
- P20,000 (Accrued Salaries expense)
- P950,000 (Notes Payable)
= P1,561,000
So, the total current liabilities of KIWI Company as of December 31, 2022 is P1,561,000.
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