Concept Introduction Current Liabilities: Current Liabilities are the debts or economic obligations that a company owes to its creditors and that have to be settled within one year or within its operating cycle, whichever period is longer. Operating Cycle: An operating cycle represents the average period of time that a company takes to acquire inventory, sell the inventory and collect cash from its customers for the inventory sold to them. To Find: The items that are normally classified as current liabilities for a company that has a 15-month operating cycle from the options given in the question. Given Info: The following items are given for classifying current liabilities (and non-current liabilities) for a company that has a 15-month operating cycle: Portion of long-term note due in 15 months. Note payable maturing in 2 years. Note payable due in 18 months. Note payable due in 11 months. FICA taxes payable. Salaries payable.

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Chapter 11, Problem 1QS

To determine

Concept Introduction

Current Liabilities:

Current Liabilities are the debts or economic obligations that a company owes to its creditors and that have to be settled within one year or within its operating cycle, whichever period is longer.

Operating Cycle:

An operating cycle represents the average period of time that a company takes to acquire inventory, sell the inventory and collect cash from its customers for the inventory sold to them.

To Find:

The items that are normally classified as current liabilities for a company that has a 15-month operating cycle from the options given in the question.

Given Info:

The following items are given for classifying current liabilities (and non-current liabilities) for a company that has a 15-month operating cycle:

Portion of long-term note due in 15 months.

Note payable maturing in 2 years.

Note payable due in 18 months.

Note payable due in 11 months.

FICA taxes payable.

Salaries payable.

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