The following are selected items from the accounting records of Seattle Chocolates for the year ended December 31, 2011:

Note payable to Northwest Bank $ 500,000

Income taxes payable 40,000

Accrued expenses and payroll taxes 60,000

Mortgage note payable 750,000

Accrued interest on mortgage note payable 5,000

Trade accounts payable 250,000

Unearned revenue 15,000

Potential liability in pending lawsuit 100,000

The note payable to Northwest Bank is due in 60 days. Arrangements have been made to renew this note for an additional 12 months.

The mortgage requires payments of $6,000 per month. An amortization table shows that its balance will be paid down to $739,000 by December 31, 2012.

Accrued interest on the mortgage note payable is paid monthly. The next payment is due near the end of the first week in January 2012.

Seattle Chocolates has been sued for $100,000 in a contract dispute. It is not possible at this time, however, to make a reasonable estimate of the possible loss, if any, that the company may have sustained.

Using the information provided, prepare the current and long-term liability sections of the company's balance sheet dated December 31, 2011.

SEATTLE CHOCOLATES

Partial Balance Sheet

December 31, 2011

Liabilities:

Current liabilities:

QUESTION 1

(Choose the best answer as well as provide amount for balance sheet)

$__________

a) Mortgage note payable

b) Unearned revenue

c) Accrued interest on mortgage note payable

d) Mortgage note payable-current portion

e) Note payable to Northwest Bank

f) Trade accounts payableIncome taxes payable

g) Accrued expenses and payroll taxes

QUESTION 2

(Choose the best answer as well as provide amount for balance sheet)

$__________

a) Mortgage note payable

b) Accrued expenses and payroll taxes

c) Unearned revenue

d) Mortgage note payable-current portion

e) Note payable to Northwest Bank

f) Income taxes payable

g) Accrued interest on mortgage note payable

h) Trade accounts payable

QUESTION 3 (Choose the best answer as well as provide amount for balance sheet)

$__________

a) Trade accounts payable

b) Mortgage note payable

c) Income taxes payable

d) Accrued interest on mortgage note payable

e) Mortgage note payable-current portion

f) Note payable to Northwest Bank

g) Accrued expenses and payroll taxes

h) Unearned revenue

QUESTION 4 (Choose the best answer as well as provide amount for balance sheet)

$__________

a) Mortgage note payable-current portion

b) Accrued expenses and payroll taxes

c) Unearned revenueAccrued interest on mortgage note payable

d) Note payable to Northwest Bank

e) Trade accounts payable

f) Income taxes payable

g) Mortgage note payable

QUESTION 5 (Choose the best answer as well as provide amount for balance sheet)

$__________

a) Income taxes payable

b) Mortgage note payable-current portion

c) Trade accounts payable

d) Unearned revenue

e) Note payable to Northwest Bank

f) Mortgage note payable

g) Accrued interest on mortgage note payable

h) Accrued expenses and payroll taxes

i)

QUESTION 6 (Choose the best answer as well as provide amount for balance sheet)

$__________

a) Accrued expenses and payroll taxes

b) Mortgage note payable

c) Accrued interest on mortgage note payable

d) Trade accounts payable

e) Unearned revenue

f) Income taxes payable

g) Note payable to Northwest Bank

h) Mortgage note payable-current portion

7. Total current liabilities $

QUESTION 8

**Long-term liabilities:

(Choose the best answer as well as provide amount for balance sheet)

$__________

a) Income taxes payable

b) Trade accounts payable

c) Unearned revenue

d) Accrued expenses and payroll taxes

e) Mortgage note payable-current portion

f) Mortgage note payable

g) Accrued interest on mortgage note payable

h) Note payable to Northwest Bank

QUESTION 9

(Choose the best answer as well as provide amount for balance sheet)

$__________

a) Note payable to Northwest Bank

b) Mortgage note payable-current portion

c) Accrued interest on mortgage note payable

d) Unearned revenue

e) Accrued expenses and payroll taxes

f) Income taxes payable

g) Mortgage note payable

h) Trade accounts payable

10. Total long-term liabilities $ _________

11. Total Liabilities $ __________