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The following are selected items from the accounting records of Denver Chocolates for the year ended December 31, 2015: Note payable to Northwest Bank. Income taxes payable.. Accrued expenses and payroll taxes Mortgage note payable. Accrued interest on mortgage note payable. Trade accounts payable.. Unearned revenue Potential liability in pending lawsuit. Other Information $500,000 40,000 60,000 750,000 . 5,000 250,000 15,000 100,000 1. The note payable to Northwest Bank is due in 60 days. Arrangements have been made to renew this note for an additional 12 months. 2. The mortgage requires payments of $6,000 per month. An amortization table shows that its balance will be paid down to $739,000 by December 31, 2016. (Note: That is, the unpaid balance will be $739,000 on December 31, 2016). 3. The accrued interest on the mortgage payable is paid monthly. The next payment is due near the end of the first week in January 2016. 4. Denver Chocolates has been sued for $160,000 in a contract dispute. As of now, it is not possible to know whether the company will win or lose in the lawsuit. It is also not possible to make a reasonable estimate of the possible loss that the company may incur if they lost. Instructions: Using the information provided, prepare the current and long-term liability sections of the company's balance sheet dated December 31, 2015. (Within each classification, items may be listed in any order.)

The following are selected items from the accounting records of Denver Chocolates for the year ended December 31, 2015: Note payable to Northwest Bank. Income taxes payable.. Accrued expenses and payroll taxes Mortgage note payable. Accrued interest on mortgage note payable. Trade accounts payable.. Unearned revenue Potential liability in pending lawsuit. Other Information $500,000 40,000 60,000 750,000 . 5,000 250,000 15,000 100,000 1. The note payable to Northwest Bank is due in 60 days. Arrangements have been made to renew this note for an additional 12 months. 2. The mortgage requires payments of $6,000 per month. An amortization table shows that its balance will be paid down to $739,000 by December 31, 2016. (Note: That is, the unpaid balance will be $739,000 on December 31, 2016). 3. The accrued interest on the mortgage payable is paid monthly. The next payment is due near the end of the first week in January 2016. 4. Denver Chocolates has been sued for $160,000 in a contract dispute. As of now, it is not possible to know whether the company will win or lose in the lawsuit. It is also not possible to make a reasonable estimate of the possible loss that the company may incur if they lost. Instructions: Using the information provided, prepare the current and long-term liability sections of the company's balance sheet dated December 31, 2015. (Within each classification, items may be listed in any order.)

Financial Accounting
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter6: Accounting For Merchandising Businesses
Section: Chapter Questions
Problem 5PA: The following selected accounts and their current balances appear in the ledger of Clairemont Co....
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The following are selected items from the accounting records of Denver Chocolates for the year ended December 31, 2015: Note payable to Northwest Bank. Income taxes payable. Accrued expenses and payroll taxes Mortgage note payable. Accrued interest on mortgage note payable Trade accounts payable. Unearned revenue.. Potential liability in pending lawsuit.. Other Information $500,000 40,000 60,000 750,000 5,000 250,000 15,000 . 100,000 1. The note payable to Northwest Bank is due in 60 days. Arrangements have been made to renew this note for an additional 12 months. 2. The mortgage requires payments of $6,000 per month. An amortization table shows that its balance will be paid down to $739,000 by December 31, 2016. (Note: That is, the unpaid balance will be $739,000 on December 31, 2016). 3. The accrued interest on the mortgage note payable is paid monthly. The next payment is due near the end of the first week in January 2016. 4. Denver Chocolates has been sued for $160,000 in a contract dispute. As of now, it is not possible to know whether the company will win or lose in the lawsuit. It is also not possible to make a reasonable estimate of the possible loss that the company may incur if they lost. Instructions: Using the information provided, prepare the current and long-term liability sections of the company's balance sheet dated December 31, 2015. (Within each classification, items may be listed in any order.)
Transcribed Image Text:The following are selected items from the accounting records of Denver Chocolates for the year ended December 31, 2015: Note payable to Northwest Bank. Income taxes payable. Accrued expenses and payroll taxes Mortgage note payable. Accrued interest on mortgage note payable Trade accounts payable. Unearned revenue.. Potential liability in pending lawsuit.. Other Information $500,000 40,000 60,000 750,000 5,000 250,000 15,000 . 100,000 1. The note payable to Northwest Bank is due in 60 days. Arrangements have been made to renew this note for an additional 12 months. 2. The mortgage requires payments of $6,000 per month. An amortization table shows that its balance will be paid down to $739,000 by December 31, 2016. (Note: That is, the unpaid balance will be $739,000 on December 31, 2016). 3. The accrued interest on the mortgage note payable is paid monthly. The next payment is due near the end of the first week in January 2016. 4. Denver Chocolates has been sued for $160,000 in a contract dispute. As of now, it is not possible to know whether the company will win or lose in the lawsuit. It is also not possible to make a reasonable estimate of the possible loss that the company may incur if they lost. Instructions: Using the information provided, prepare the current and long-term liability sections of the company's balance sheet dated December 31, 2015. (Within each classification, items may be listed in any order.)
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