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?

Question

Business

Denise Johnson

2 January, 02:07

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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Answers (1)

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Jase Floyd · Answer 1

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).