Medlen Company, has the following account balances at December 31, 2014.
|
Notes payable ($60,000 due after 12/31/15) |
$100,000 |
|
Unearned service revenue |
70,000 |
|
Other long-term debt ($90,000 due in 2015) |
250,000 |
|
Salaries and wages payable |
32,000 |
|
Accounts payable |
63,000 |
In addition, Medlen is involved in a lawsuit. Legal counsel feels it is probable Medlen will pay damages of $25,000 in 2015.
(a)Prepare the current liability section of Medlen”s December 31, 2014, balance sheet.
(b)Medlen”s current assets are $570,000. Compute Medlen”s working capital and current ratio.