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E9-1 LO9-1, 9-4, 9-5 Identifying Current Liabilities, Computing...

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Accounting

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E9-1 LO9-1, 9-4, 9-5 Identifying Current Liabilities, Computing Working Capital, and Explaining Working Capital Diane Corporation is preparing its year-end balance sheet. The company records show the following selected amounts at the end of the year: $530,000 362,000 Total assets Total noncurrent assets Liabilities: Notes payable (8%, due in 5 years) Accounts payable Income taxes payable Liability for withholding taxes Rent revenue collected in advance Bonds payable (due in 15 years) Wages payable Property taxes payable Note payable (10%, due in 6 months) Interest payable Common stock 15.000 56,000 14,000 3,000 7,000 90,000 7.000 3,000 12.000 400 100,000 Required: 1. Identify current liabilities and compute working capital. Why is working capital important to management? 2. Would your computation be different if the company reported $250,000 worth of contingent liabili ties in the notes to its financial statements? Explain

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