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Prepare The Current Liabilities Section of The Statement of Financial Position For The Layla Company As of December 31, 2020

The Layla Company's current liabilities as of December 31, 2020 include $114,000 in notes payable for raw materials, $60,000 in bank notes payable due within 90 days, $40,000 in notes payable to officers due on demand, $88,000 in accounts payable for raw materials, a $26,000 cash balance and $35,000 cash overdraft, $48,000 in dividends in arrears, $2,600 in income tax withheld, $6,000 in advance receipts, and $20,000 due in 2021 for equipment installment notes with the remaining $20,000 due in 2022. Additional current liabilities include a $3

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723 views1 page

Prepare The Current Liabilities Section of The Statement of Financial Position For The Layla Company As of December 31, 2020

The Layla Company's current liabilities as of December 31, 2020 include $114,000 in notes payable for raw materials, $60,000 in bank notes payable due within 90 days, $40,000 in notes payable to officers due on demand, $88,000 in accounts payable for raw materials, a $26,000 cash balance and $35,000 cash overdraft, $48,000 in dividends in arrears, $2,600 in income tax withheld, $6,000 in advance receipts, and $20,000 due in 2021 for equipment installment notes with the remaining $20,000 due in 2022. Additional current liabilities include a $3

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keneth puada
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© © All Rights Reserved
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Prepare the current liabilities section of the statement of financial position for the

Layla Company as of December 31, 2020.

1. Notes payable arising from the purchase of raw materials, 114,000.

Materials 114,000
Notes payable 114,000

2. Notes payable-bank, due in 90 days, 60,000. ( collateral on this consist of 80,000 in


marketable securities.)

3. Notes payable to officers, due on demand, 40,000

Salaries 40,000
Notes payable 40,000

4. Accounts payable arising from the purchase of raw materials, 88,000

Materials 88,000
Accounts payable 88,000

5. Cash balance with Zilong Bank, 26,000; cash overdraft with Alucard Bank, 35,000

Cash in bank- Zilong Bank 26,000

6. Dividends in arrears on cumulative preference share, 48,000


7. Income tax withheld, 2,600
8. Advance receipts on special jobs being manufactured to specification for customers,
6,000
9. Installment notes on equipment purchased, 40,000, of which 20,000 is due in 2021
and the balance in 2022.

Equipment 40,000
Notes payable 20,000
Long-term notes payable 20,000

10. Accounts receivable credit balance, 3,600

11. Estimated cost of meeting service requirement guarantees on products produced


and sold, 14,400.
12. One of the company’s products exploded causing injury to a customer’s employee.
The estimated claim is 4,800. The company has no insurance to cover a loss of this
nature.

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