Current Liabilities and Ratios Several accounts that appeared on Kruse’s 2010 balance sheet are as follows:

Accounts Payable $ 55,000 Equipment $950,000 Marketable Securities 40,000 Taxes Payable 15,000 Accounts Receivable 180,000 Retained Earnings 250,000 Notes Payable, 12%, due in 60 days 20,000 Inventory 85,000 Capital Stock 1,150,000 Allowance for Doubtful Accounts 20,000 Salaries Payable 10,000 Land 600,000 Cash 15,000 Required 1. Prepare the Current Liabilities section of Kruse’s 2010 balance sheet.

2. Compute Kruse’s working capital.

3. Compute Kruse’s current ratio. What does this ratio indicate about Kruse’s condition?

AppendixLO1