On January 1, 2015, Junction Limited, a calendar-year company, issued $160,000 of notes payable, of which $65,000 is due on January 1 for each of the next four years.The proper statement of financial position presentation on December 31, 2015, is
A)Current Liabilities, $160,000.
B)Non-current Liabilities, $160,000.
C)Current Liabilities, $65,000; Non-current Liabilities, $95,000.
D)Current Liabilities, $95,000; Non-current Liabilities, $65,000.

Question

Quizplus · Accepted Answer

The portion of the notes payable that is due within the next year ($65,000) should be classified as current liabilities, while the remaining portion ($160,000 - $65,000 = $95,000) should be classified as non-current liabilities. Therefore, the proper statement of financial position presentation on December 31, 2015, is current liabilities of $65,000 and non-current liabilities of $95,000.

On January 1, 2015, Junction Limited, a Calendar-Year Company, Issued