Question

Zahn Inc. sold 11,500 annual magazine subscriptions for $61 during December 20Y4. These new subscribers will receive monthly issues, beginning in January 20Y5. Zahn Inc. issued a $123,200, 180–day, 5% note payable on December 1, 20Y4. On March 31, 20Y5, Zahn Inc. had accounts payable of $ 22,700 and accrued wages payable of $6,700.

Required:
Prepare the Current Liabilities section of the balance sheet for Zahn Inc. on March 31, 20Y5.

Answer 1

Zahn Inc.

Current Liabilities Section of the Balance Sheet

March 31, 20Y5

Current liabilities Amount

Accounts payable $22,700

Accrued wages payable $6,700

Accrued interest payable $3,080

($123,200 * 5% * 6/12)

Notes payable $123,200

Advances on magazine subscriptions $526,125

(11,500 * $61 * 9/12)

Total current liabilities $681,805