Current vs. Long-term Liabilities) Frederic Chopin Corporation is preparing its December 31, 2014, balance sheet. The following items may be reported as either a current or long-term liability.
1. On December 15, 2014, Chopin declared a cash dividend of $2.50 per share to stockholders of record
on December 31. The dividend is payable on January 15, 2015. Chopin has issued 1,000,000 shares
of common stock, of which 50,000 shares are held in treasury.
2. At December 31, bonds payable of $100,000,000 are outstanding. The bonds pay 12% interest every
September 30 and mature in installments of $25,000,000 every September 30, beginning September 30,
2015.
3. At December 31, 2013, customer advances were $12,000,000. During 2014, Chopin collected
$30,000,000 of customer advances; advances of $25,000,000 should be recognized in income.
Instructions
For each item above, indicate the dollar amounts to be reported as a current liability and as a long-term
liability, if any.