Faulkner Company Has the Following Selected Accounts After Posting Adjusting

question 40

Essay

Faulkner Company has the following selected accounts after posting adjusting entries: $\begin{array}{lr}\text { Accounts Payable } & \$ 45,000 \\\text { Notes Payable, 3-month } & 70,000 \\\text { Accumulated Depreciation-Equipment } & 14,000 \\\text { FlCA Taxes Payable } & 27,000 \\\text { Notes Payable, 5-year, } 8 \% & 30,000 \\\text { Warranty Liability } & 29,000 \\\text { Payroll Tax Expense } & 6,000 \\\text { Interest Payable } & 3,000 \\\text { Mortgage Payable } & 200,000 \\\text { Sales Taxes Payable } & 16,000\end{array}$ Instructions
(a) Prepare the current liability section of Faulkner Company's balance sheet assuming $25000 of the mortgage is payable next year. (List liabilities in magnitude order with largest first.)
(b) Comment on Faulkner 's liquidity assuming total current assets are $450000.

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Definitions:

Rising

Often refers to the increase in value, quantity, or level of something over time, frequently used in the context of prices, temperatures, or other measurable factors.

Average Cost Curve

A graph that illustrates the cost per unit of output by dividing the total cost by the quantity of output produced, typically showing how costs fluctuate with changes in scale.

Marginal Cost Curve

A graph that shows the increase in cost incurred by producing one more unit of a good or service.

U-Shaped

Characterizes graphs or functions that have a visible dip in the middle, creating a shape similar to the letter "U," often found in economic analyses representing cost curves.