The following selected account balances are from LightHouse Distributors' adjusted trial balance at September 30, 2014: Accounts

Question:

The following selected account balances are from LightHouse Distributors' adjusted trial balance at September 30, 2014:
Accounts payable ...................................................... $ 90,000
Accounts receivable .................................................... 182,000
Bank overdraft .......................................................... 62,500
CPP payable ............................................................. 7,500
EI payable ................................................................ 3,750
HST payable ............................................................ 15,000
Income tax payable .................................................... 35,000
Interest payable ........................................................ 10,000
Merchandise inventory ................................................ 275,000
Mortgage payable ...................................................... 150,000
Notes payable .......................................................... 100,000
Prepaid expenses ...................................................... 12,500
Property taxes payable ................................................ 10,000
Redemption rewards liability ........................................ 5,000
Unearned gift card revenue .......................................... 30,000
Vacation pay payable ................................................. 13,500
Warranty liability ..................................................... 22,500
Workers' compensation payable ................................... 1,250
Additional information:
1. On September 30, 2014, the unused operating is $75,000.
2. Redemption rewards, warranties, and gift cards are expected to be redeemed within one year.
3. Of the mortgage, $10,000 is due each year.
4. Of the note payable, $1,000 is due at the end of each month.
Instructions
(a) Prepare the current liabilities section of the balance sheet.
(b) Calculate LightHouse's current ratio and acid-test ratio.
(c) Explain why the company did not report any cash as part of its current assets.
Line of Credit
A line of credit (LOC) is a preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit. A LOC is...