Question

At December 31, 2018, a Water Enterprise Fund has outstanding revenue bonds payable of $1 million, of which $40,000 is due to be paid on February 15, 2019, and $50,000 is due to be paid on August 15, 2019. How should it report this liability in its fund statement of net position as of December 31, 2018?

Answer 1

See explanation section

Step-by-step explanation:

Water Enterprise Fund

Balance Sheet (Partial)

As at 31 December, 2018

Liabilities

Current Liabilities

Bonds Payable - Due to be paid on February 15, 2019 $40,000

Bonds Payable - Due to be paid on August 15, 2019 $50,000

Total current liabilities $90,000

Long-term liabilities

Bonds payable $910,000

Total liabilities $1,000,000

Balance sheet has another name - Statement of net position.

Therefore, the company has $90,000 current liabilities because those will be paid within the next year while the remaining balance will not be paid within the next year (Assuming 2020).