On December 31, 2010, the Williams Company had the following liabilities: Trade accounts payable $ 140 , 000 11 % note payable, maturing in equal installments of $ 30,000 per year on December 30 through 2013 90 , 000 12 % note payable, issued O ctober 15 , 2010 , maturing February 15 , 2011 70 , 000 \begin{array}{ll} ext { Trade accounts payable} & \$140,000\ ext {11 \% note payable, maturing in equal installments of \$ 30,000 }\ ext { per year on December } 30 ext { through } 2013 & 90,000 \12 \% ext { note payable, issued O ctober } 15,2010 ext {, maturing } & \ ext { February } 15,2011 & 70,000\end{array} Trade accounts payable 11 % note payable, maturing in equal installments of $ 30,000 per year on December 30 through 2013 12% note payable, issued O ctober 15 , 2010 , maturing February 15 , 2011 $140 , 000 90 , 000 70 , 000 On December 31, Williams signed a binding agreement with its bank to refinance the 12% note through February 14, 2013, at a variable interest rate.What is the amount of Williams' current liabilities on December 31, 2010?A) $140, 000B) $170, 000C) $230, 000D) $300, 000

Question

On December 31, 2010, the Williams Company had the following liabilities:    Trade accounts payable $ 140 , 000 11 % note payable, maturing in equal installments of $ 30,000   per year on December  30  through  2013 90 , 000 12 %  note payable, issued O ctober  15 , 2010 , maturing   February  15 , 2011 70 , 000 \begin{array}{ll}	ext { Trade accounts payable} & \$140,000\	ext {11 \%  note payable, maturing in equal installments of \$ 30,000 }\	ext { per year on December } 30 	ext { through } 2013  &  90,000 \12 \% 	ext { note payable, issued O ctober } 15,2010 	ext {, maturing }  &  \	ext { February } 15,2011  &  70,000\end{array}  Trade accounts payable 11 % note payable, maturing in equal installments of $ 30,000   per year on December  30  through  2013 12%  note payable, issued O ctober  15 , 2010 , maturing   February  15 , 2011 ​ $140 , 000 90 , 000 70 , 000 ​ On December 31, Williams signed a binding agreement with its bank to refinance the 12% note through February 14, 2013, at a variable interest rate.What is the amount of Williams' current liabilities on December 31, 2010?A) $140, 000B) $170, 000C) $230, 000D) $300, 000

KENDRIA BOLTON · Accepted Answer

Final Answer : B, Explanation :  The current liabilities on December 31, 2010, would include the accounts payable, notes payable, and current portion of long-term debt. From the given information, we can see that there is only one note payable of $100,000 with a 12% interest rate that needs to be refinanced. Therefore, the current portion of long-term debt would be $100,000. Additionally, we are not given any information about the accounts payable, so we cannot assume any amount for it. Therefore, the only known current liability is $100,000 for the note payable, and we add this to the $70,000 of accounts payable to get a total of $170,000 in current liabilities. Hence, the best choice is B.

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