Directions: Identify which of the following liability accounts are usually classified as either current
liabilities (CL) or non-current liabilities (NCL).
CL 1. Accounts Payable
CL 2. Trade Notes Payable due within 1 year
NCL 3. Trade Note Payable due within 2 years
NCL 4. Non- Trade Note Payable due within 2 years
CL 5. Dividend Payable
NCL 6. Bonds Payable
CL 7. Accrued interest on Bonds Payable
NCL 8. Unearned Rent Income
NCL 9. Mortgage payable
NCL 10. Estimated Warranty Liability
CL 11. Bank Overdraft
NCL 12. Deferred-tax liability
CL 13. Income Tax payable
NCL 14. Lease Liability
NCL 15. Credit balance in Accounts Receivable
M Company provided the following information on December 31, 2020:
Accounts payable after deducting debit balances in suppliers accounts of P100,000 P 600,000
Accrued liabilities 50,000
Note payable- due March 31, 2021 1,000,000
Note payable- due May 1, 2021 800,000
Bonds payable- due December 31, 2021 2,000,000
On March 1, 2021 before the 2020 financial statements were issued, the note payable of P1,000,000 was
replaced by an 18-month note for the same amount. The entity is considering similar action on the
P800,000 note due May 1, 2021. The financial statements were issued on March 31, 2021.
Required:
1. Compute total current liabilities
2. Compute total noncurrent liabilities
A Company is planning to refinance certain short-term obligations on a long term basis. The 2020
financial statements will be published on March 15, 2021. On December 31, 2020, before reclassification
of short-term debt, the liabilities are:
Accounts payable 7,000,000
Note payable – bank 12,000,000
Accrued expenses 4,000,000
Mortgage payable 4,000,000
Note payable – due in 2022 3,000,000
The entity intends to refinance 9,000,000 of the 12,000,000 bank note payable on a long term basis.
Although the entire 12,000,000 is due on June 30, 2021, the bank has informally agreed to extend the
maturity date for 6,000,000 to June 30, 2022, if necessary.
On January 31, 2021, the entity issued share capital for 4,000,000, net of issue costs and underwriting
fees of 500,000.
On February 15, 2021, the entity entered into a financing agreement with a financially capable
commercial bank, permitting the entity to borrow up to 3,000,000. Borrowings available at the entity’s
option on April 1, 2021 will mature five years after the loan date.
The entity used the entire proceeds of the issue of share capital to retire part of the current note payable
and now intends to draw down the entire available commitment of the five year debt on April 1, 2021.1
Required:
1. Compute total current liabilities
2. Compute total noncurrent liabilities
G Company disclosed the following liability account balances on December 31, 2020:
Accounts Payable 1,900,000
Bonds Payable 3,400,000
Premium on bonds payable 200,000
Deferred tax liability 400,000
Dividends payable 500,000
Income tax payable 900,000
Note payable, due January 31, 2021 600,000
The deferred tax liability is based on temporary differences that will reverse in 2021. In the December 31,
2020 Statement of financial position, what amount should be reported as:
1. Current Liabilities
2. Non-Current Liabilities