The following are selected items from the accounting records of Georgia Peach for the year ended December 31, 2021.

Other Information
1. The note payable to Smithfield Bank is due in 60 days. Arrangements have been previously approved to renew this note for an additional 24 months.
2. The mortgage requires payments of $10,000 per month. An amortization table shows that its balance will be paid down to $733,000 by December 31, 2022.
3. Accrued interest on the mortgage note payable is paid monthly. The next payment is due near the end of the first week in January 2022.
4. Georgia Peach has been sued for $2,000,000 in a product liability case. It is not possible at this time, however, to make a reasonable estimate of the possible loss, if any, that the company may have sustained.

Instructions
a. Using the information provided, prepare the current and long-term liability sections of Georgia Peach’s balance sheet dated December 31, 2021. (Within each classification, items may be listed in any order.)
b. Explain briefly how the information in each of the four numbered paragraphs influenced your presentation of the company’s liabilities.

Transcribed Image Text:

Note payable to Smithfield Bank .. Income taxes payable.... Accrued expenses and payroll taxes... Mortgage note payable Accrued interest on mortgage note payable. Trade accounts payable.... Unearned revenue.. Potential liability in pending lawsuit.... $ 140,000 15,000 26,000 750,000 15,000 275,000 33,000 2,000,000