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29 January, 06:14

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?

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  1. 29 January, 06:40
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    See explanation section

    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).
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