The Following Is a Partial List of Account Balances for Van

question 59

Essay

The following is a partial list of account balances for Van Buskirk Inc. as of December 31, 20X1: $$\begin{array} { | l | r | } \hline \text { Trade Payables } & \$ 5,000 \\\hline \text { Trade Receivables } & 6,000 \\\hline \text { Bonds payable (100\% due in 10 years) } & 40,000 \\\hline \text { Mortgage payable (10\% due within one year) } & 10,000 \\\hline \text { Notes payable (due in 6 months) } & 2,000 \\\hline \text { Salaries payable } & 800 \\\hline \text { Sales revenue } & 49,000 \\\hline \text { Current income taxes payable } & 8,000 \\\hline \text { Deferred revenue } & 800 \\\hline\end{array}$$ Required: Prepare the liability section of Van Buskirk's classified statement of financial position for December 31, 20X1.

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Definitions:

Future Cash Flows

The projected cash receipts and payments a company expects to incur over a certain period in the future.

Bond Ratings

Bond ratings are assessments made by credit rating agencies about the creditworthiness of a bond issuer, which affect the interest rates bonds carry.

Default Risk

The risk that a borrower fails to make the promised loan or bond repayments to the lender or bondholders.

Maturity Risk

The risk associated with the length of time until the face value of an investment is returned, affecting its susceptibility to interest rate changes.