Accounts payable represents the amount that a company owes to its regular business creditors from whom it has bought goods and services on an open account of credit.

10 Accounts Payable $85,000

Money that is owed to a bank or other lender appears on the balance sheet under notes payable which is evidenced by by a written promisory note that has been given by the company.

11 Notes Payable $ 30,000

A company that owes salaries and wages to its employees , interest on borrowed funds from banks interest to bondholders, fees to attorneys, insurance premiums, pension funds, and similar items. In general, these services have already been rendered to the corporation, but the company has yet to pay for the services provided. This figure is grouped into a category called Accrued Notes Payable.

13 Accrued Expense Payable - $28,000

Taxes due to the Internal Revenue Service is similar to Accrued Expenses Payable. This amount is generally for taxes that come due on a quarterly basis by the company.

14 Federal Income Tax Payable - $12,000

The total current liabilities item which includes all the items listed under the classification.

The government provides businesses with tax incentives to make certain kinds of investments that will benefitthe economy. To smooth fluncuations in earnings, which would occur if taxes varied significantly from year to year, companies include a charge for deferred taxes in theitr calculations on the income statement and show what taxes would be without the accelerated without the wite-offs of depreciation. This charge then accumulates as a long term liability.

15 Deferred income Taxes $10,000

This is money received by the company from bondholders who are given a certificate called a bond as evidence for the loan. THE bond is really a formal promissory note issued by the company which the company agres to pay at a set point in time i nthe future. and also pay interest every year. The bond interest is paid semi-annually. A debenture is a bond backed by the general credit of the corporation rather than by the company's assets. Debentures are only issued by large , well-established corporations.

16 Debentures $110,000 ( 9.50%, due 2030 )

This item is the total equity interest that all stockholders have in the corporation. This is the corporations net worth less all liabilities.

These shares have preference over common stock with respect to dividends and in he distribution of assets in case of liquidation. Specific provisions can be obtained from a corporation's charter. Preferred stock can be cumulative and non-participating or non-cumulative and participating. Cumulative means that inany one yearthe dividend is not paid,accumulates in favor of the preferredshare holders and must be paid to them first when available and declared before any dividends are distributed on the common stock.

17 Preferred Stock $4.25 cumulative, $100.00 par value, authorized 60,000 shares, oustanding 60,000 shares

Common stock has no limit on dividends payable each year. Common stock shareholders are the "true" owners of the firm and bear the majority of the risk because they are last to receive any compensation if the company fails or liquidates. However, they share much greater in the success of the firm when earnings are high because they receive higher dividends.

18 CommonStock ( $1.00 par value, authorized 20,00,000 shares, 15,000,000 outstanding )