Medlen Company, has the following account balances at December 31, 2020.
Notes payable ($60,000 due after 12/31/21) ...................$100,000
Unearned service revenue .....................................................70,000
Other long-term debt ($90,000 due in 2021) .....................250,000
Salaries and wages payable ...................................................32,000
Accounts payable ....................................................................63,000
In addition, Medlen is involved in a lawsuit. Legal counsel feels it is probable Medlen will pay damages of $25,000 in 2021.
a. Prepare the current liabilities section of Medlen’s December 31, 2020, balance sheet.
b. Medlen’s current assets are $570,000. Compute Medlen’s working capital and current ratio.