Brewer Company Has the Following Selected Accounts After Posting Adjusting

question 99

Essay

Brewer Company has the following selected accounts after posting adjusting entries:
$\begin{array}{lr}\text { Accounts Payable } & \$ 55,000 \\\text { Notes Payable, 3-month } & 90,000 \\\text { Accumulated Depreciation-Equipment } & 14,000 \\\text { Notes Payable, 5-year, 8\% } & 75,000 \\\text { Payroll Taxes Expense } & 6,000 \\\text { Interest Payable } & 5,000 \\\text { Mortgage Payable } & 180,000 \\\text { Sales Taxes Payable } & 23,000\end{array}$

Instructions
(a) Prepare the current liability section of Brewer Company's balance sheet, assuming $12,000 of the mortgage is payable next year.
(b) Comment on Brewer's liquidity, assuming total current assets are $450,000.

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Definitions:

Revenue And Receivables

The income generated from normal business operations and the claims to cash or other assets by an entity, usually resulting from sales transactions.

Voluntary Health And Welfare Entities

Organizations that operate for the purpose of promoting health and welfare, primarily relying on voluntary contributions from the public.

Classifications

The systematic arrangement of business transactions or elements in categories according to established criteria.

Expenses

Costs incurred by a business in the process of earning revenues.