Current Liabilities: Current liabilities are those obligations for the company which it is supposed to pay within a year or within the same accounting period, whichever is longer. They include accounts payable, wages, salaries to employees, interest payable and so on. Current Assets: Current assets are those classifications of assets that can be converted to cash within one year or within one operating cycle, whichever is longer, for example, accounts receivables, supplies and so on. They are the assets that can be easily converted into cash and include all the liquid assets. Cash is the most liquid current asset. To Identify: The current liabilities of A Company using its annual report and also to identify whether the current liabilities are higher or lower than the current assets for the given two years.

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Chapter 4, Problem 19Q

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Current Liabilities: Current liabilities are those obligations for the company which it is supposed to pay within a year or within the same accounting period, whichever is longer. They include accounts payable, wages, salaries to employees, interest payable and so on.

Current Assets: Current assets are those classifications of assets that can be converted to cash within one year or within one operating cycle, whichever is longer, for example, accounts receivables, supplies and so on. They are the assets that can be easily converted into cash and include all the liquid assets. Cash is the most liquid current asset.

To Identify: The current liabilities of A Company using its annual report and also to identify whether the current liabilities are higher or lower than the current assets for the given two years.

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Assets Martinez Company Comparative Balance Sheets December 31 2025 2024 Cash $91,000 $52,000 Accounts receivable 52,000 36,400 Inventory 72,800 52,000 Property, plant, and equipment 156,000 202,800 Accumulated depreciation Total (83,200) [62,400) $288,600 $290,800 Liabilities and Stockholders' Equity Accounts payable $49,400 $ 39,000 Income taxes payable 18,200 20,800 Bonds payable 44,200 85,800 Common stock 46,900 36,400 Retained earnings 130,000 98,800 Total $288,600 $280,800 Martinez Company Income Statement For the Year Ended December 31, 2025 Sales revenue $629,200 Cost of goods sold 455,000 Gross profit 174,200 Selling expenses $46,800 Administrative expenses 15,600 62,400 Income from operations 111,800 Interest expense 7,800 Income before income taxes 104,000 Income tax expense 20,800 Net income $83,200 Additional data: 1. Depreciation expense was $45,500. 2. Dividends declared and paid were $52,000. 3. During the year, equipment was sold for $22,100 cash. This equipment…