United Supply has a $30 million liability at December 31, 2021, of which $6 million is payable in each of the next five years. United Supply reports the liability in the balance sheet as a: Multiple Choice $24 million current liability and a $6 million long-term liability. $30 million long-term liability. $30 million current liability. $6 million current liability and a $24 million long-term liability.

A current liability has a settlement period of less than 12 months whereas any liability that has a settlement period of beyond 12 months is known as a long term liabilityAs on balance sheet date, out of a total $30 million payable, $6 million is payable in the next 12 months and the remaining $24 million will be payable beyond a period of 12 months. Hence $ 6million will be reported as a current liability and the remainign$24 million will be reported as long term liabilityCorrect choice D

Answered: United Supply has a $30 million…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

100%

United Supply has a $30 million liability at December 31, 2021, of which $6 million is payable in each of the next five years. United Supply reports the liability in the balance sheet as a:

Multiple Choice

$24 million current liability and a $6 million long-term liability.
$30 million long-term liability.
$30 million current liability.
$6 million current liability and a $24 million long-term liability.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions