Lepid Company has the following account balances at December 31, 2010.
|
Notes payable ($80,000 due after 12/31/11) |
$200,000 |
|
Unearned revenue |
75,000 |
|
Other long term debt ($30,000 due in 2011) |
150,000 |
|
Salaries payable |
22,000 |
|
Other accrued expenses |
15,000 |
|
Accounts payable |
100,000 |
In addition, Lepid is involved in a lawsuit. Legal counsel feels it is probable Lepid will pay damages of $38,000 in 2011.
(a) Prepare the current liability section of Lepid’s December 31, 2010, balance sheet.
(b) Lepid’s current assets are $504,000. Compute Lepid’s working capital and current ratio.