Reference no: EM132914027

The following information is available from the records of Alpha Ltd. at December 31, 2016:

Accounts payable $ 40,000
Income taxes payable 10,600
Long-term note payable; see (a) 42,000
Prepaid expenses 12,500
Short-term note payable; see (b) 20,000
Unearned revenue 5,000

Additional information:

(a) On December 31, 2016 the company signed a 10%, 4-year note payable. The note is payable in four annual installment payments of $10,500 plus interest on each date of December 31, 2017, 18, 19, 20.

(b) On October 1, 2016, the company signed a 9 month, 8% note payable.

(c) During 2016, the company began selling a new product with a warranty. This is the first warranty it has ever offered. The company sold $240,000 of the new product and it is estimated the warranty will cost the company 5% of all sales. During the year the company paid $7,000 of total warranty costs.

(d) At December 31, 2016, the company had $5,500 in unpaid wages that remain unpaid and unrecorded.

Required:

Problem 1: Use all of the appropriate data from the information above to prepare the liability section of Alpha Ltd's balance sheet at December 31, 2016, in good form.