The following information is provided for a company. All liabilities are due to be satisfied within one year unless stated otherwise.

Retained earnings $ 52,500
Supplies 37,500
Equipment 72,500
Accounts receivable 9,100
Deferred revenue 6,500
Accounts payable 17,000
Common stock 25,500
Notes payable (due in 18 months) 35,500
Interest payable 7,500
Cash 22,900

What is the amount of current liabilities?

Question

The following information is provided for a company. All liabilities are due to be satisfied within one year unless stated otherwise.

Retained earnings	$ 52,500
Supplies	37,500
Equipment	72,500
Accounts receivable	9,100
Deferred revenue	6,500
Accounts payable	17,000
Common stock	25,500
Notes payable (due in 18 months)	35,500
Interest payable	7,500
Cash	22,900

What is the amount of current liabilities?

BlackTom AI · Accepted Answer

To determine current liabilities, identify which liabilities are due within one year.
Option by option analysis:
Option 1: $66,500. This would imply summing all liabilities, including the long-term note payable due in 18 months, which is not current. Current liabilities exclude long-term obligations, so this overstates the amount.
Option 2: $24,500. This appears to count only some short-term obligations (for example, accounts payable 17,000 plus interest payable 7,500) and omits the deferred revenue 6,500. Since deferred revenue represents obligations payable within one year arising from prepayments, it is a current liability and must be included. Therefore this figure is too low.
Option 3: $31,000. This matches the sum of all current liabilities: accounts payable 17,000 + deferred revenue 6,500 + interest payable 7,500 = 31,000. The note payable is due in 18 months and is not current, so it is excluded. This option correctly counts all current liabilities.
Option 4: $46,600. This seems to combine multiple current liabilities but overcounts somewhere, likely by incorrectly including or excluding items. For example, if you add 17,000 (accounts payable) + 6,500 (deferred revenue) + 7,500 (interest payable) you get 31,000, not 46,600, so this option is not consistent with the given data.
In summary, the only amount that accurately represents current liabilities is 31,000, since it includes all items due within one year and excludes the long-term notes payable.

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