Question

Magnum Retailers had the following Liabilities balance as of the Balance Sheet date of October 31,...

Magnum Retailers had the following Liabilities balance
as of the Balance Sheet date of October 31, 2019.
Accounts Payable          25,500
Unearned Revenue          13,500
Long-Term Debt        950,000 ($750,000 due after October 31, 2020)
Salary Payable        155,800
Notes Payable        750,000 ($450,000 due by October 31, 2020)
The company is in a lawsuit which is expected to be settled in 6-months.
The lawsuit amount is $150,000 and the laywers predict it will be remote.
What is the total Current Liabilities?
Business   Accounting   
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Answer #1

Current labilties are short term financial obligation due with in year or due with in a operation cycle

Calulation of toatal current liabilities of Magnum retailers

Particulars Amount

Accounts Payable 25,500
Unearned revenvue 13,500
Due from longterm debt 7,50,000
Salaries Payable 1,55,800  
Notes Payable 4,50,000

TOTAL 13,84,900

Legal suit is not a current liability because actual liability to pay is arise only after loosing the case. It is just contingent liability . Actual liability may or may not be arised . it depens upon future unforsean event.

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