The Cotton Company Ltd has the following selected accounts after posting adjusting entries:

- Accounts payable$40,000

-Notes payable, 6-month$75,000

-Accumulated depreciation vehicles$17,000

-Notes payable, 5-year, 8%$70,000

-Income tax expense$8,000

-Interest payable$7,000

-Mortgage payable$115,000

-GST payable$27,000

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Required:

(a)Prepare the current liability section of The Cotton Company's Statement of Financial Position, assuming $15,000 of the mortgage is payable next year (precise formatting is not required - but make sure the inclusions, figures, and total/s are clear).

(b)Comment on The Cotton Company's liquidity, assuming total current assets are $300,000.Refer to relevant accounting ideas and terms in your comments, and state what is meant by 'liquidity'.