Question

Included in Sheridan Management Corporation's December 31, 2025, trial balance are the following accounts: Accounts Payable $122,000, Accounts Receivable $136,000, Pension Liability $46,000, Discount on Bonds Payable $19,000, Unearned Revenue $40,000, Bonds Payable $442,000, Salaries and Wages Payable $25,000, Payroll Taxes Payable $6,200, and Common Stock $480,000. Prepare the long-term liabilities section of the balance sheet.

Answer 1

Sheridan Management Corporation's long-term liabilities on the balance sheet consist of Bonds Payable ($442,000) less Discount on Bonds Payable ($19,000) plus Pension Liability ($46,000), totaling $469,000.

Step-by-step explanation:

The long-term liabilities section of Sheridan Management Corporation's balance sheet includes several accounts. Here's how to prepare it:

• Bonds Payable: $442,000
• Less: Discount on Bonds Payable: $19,000
• Pension Liability: $46,000

Other liabilities such as Accounts Payable, Unearned Revenue, Salaries and Wages Payable, and Payroll Taxes Payable are typically considered short-term liabilities and would not be listed in the long-term liabilities section. The Common Stock is part of the equity section and is not a liability.

To calculate the total long-term liabilities, subtract the Discount on Bonds Payable from the Bonds Payable and add the Pension Liability:

1. Bonds Payable: $442,000
2. Less: Discount on Bonds Payable: $19,000
3. Add: Pension Liability: $46,000

Total Long-Term Liabilities: ($442,000 - $19,000) + $46,000 = $469,000