Question: As of December 31 of the current year, Petersen Corporation has prepared the following information regarding its liabilities and other obligations:
- Notes payable, of which $12,000 will be repaid within the next 12 months $ 80,000
- Interest expense that will result from existing liabilities over the next 12 months 125,000
- Lawsuit pending against Petersen, in which $600,000 is claimed in damages.
Legal counsel can make no reasonable estimate of the company's ultimate liability at this time 600,000
- 20-year bond issue that matures in two years. The entire amount will be repaid from a bond sinking fund 900,000
- Accrued interest on the 20-year bond issue as of the balance sheet date 36,000
- Three-year commitment to John Hoskins as chief financial officer at a salary of $275,000 per year 825,000
- Note payable due within 90 days (but that is approved to be extended for an additional 18 months 75,000
- Cash deposits from customers for goods and services to be delivered over the next nine months 300,000
- Income taxes, of which $100,000 are currently payable and the remainder deferred indefinitely 185,000
Prepare a listing of the Petersen Corporation's current and long-term liabilities as they should be presented in the company's December 31 balance sheet. (Hint: Present notes payable that are expected to be paid in the next year as a single amount in current liabilities and combine all other notes payable in a single amount of notes payable in the long-term liabilities.)