Question

Use the following information to answer the question about BobCat Co. at the end of 2017:

Accounts receivable $44,890
Accounts payable 6,405
Cash 16,070
Common stock 42,500
Long-term notes payable 20,600
Merchandise inventory 28,475
Salary Payable 28,170
Retained earnings 50,465
Prepaid insurance 2,365
Current liabilities are:

A. 6,405
B. 20,600
C. 34,575
D. 36,940

Answer 1

c. $34,575

Step-by-step explanation:

Data provided in the question

Accounts receivable = $44,890

Accounts payable = $6,405

Cash = $16,070

Common stock = $42,500

Long-term notes payable = $20,600

Merchandise inventory = $28,475

Salary Payable = $28,170

Retained earnings = $50,465

Prepaid insurance = $2,365

So, The computation of the current liabilities are as follows

= Accounts payable + salary payable

= $6,405 + $28,170

= $34,575

Therefore, the current liabilities only includes the account payable and the salary payable.