Chapter 11, Problem 7E

(a)

To determine

Current Liability: Every company has some debts or liabilities which need to be paid in less than one year or during current accounting period. Those debts or liabilities are called current liabilities.

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period.

To prepare: The current liabilities section of Company Y’s balance sheet.

(b).

To determine

To analyze: The liquidity for company Y.