{"id":294,"date":"2024-09-06T16:48:23","date_gmt":"2024-09-06T16:48:23","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/introduction-to-reporting-current-liabilities\/"},"modified":"2024-09-06T16:48:23","modified_gmt":"2024-09-06T16:48:23","slug":"introduction-to-reporting-current-liabilities","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/introduction-to-reporting-current-liabilities\/","title":{"raw":"Introduction to Reporting Current Liabilities","rendered":"Introduction to Reporting Current Liabilities"},"content":{"raw":"\n

What you will learn to do: Illustrate proper reporting of current liabilities<\/h2>\nAs we discussed earlier, the reason current assets are reported on a classified balance sheet separately from noncurrent assets is so that analysts and investors can easily compare current assets to current liabilities.\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
THE HOME DEPOT INC.\nCONSOLIDATED BALANCE SHEET\n<\/caption>\n
in millions, except per share data<\/em><\/th>\nFebruary 2, 2020<\/th>\nFebruary 3, 2019<\/th>\n<\/tr>\n<\/thead>\n
Category, <\/span>Assets<\/strong><\/td>\n<\/tr>\n
Subcategory, <\/span>Current Assets:<\/td>\n<\/tr>\n
     Cash and cash equivalents<\/td>\n$     2,133<\/td>\n$     1,778<\/td>\n<\/tr>\n
     Receivables, net<\/td>\n2,106<\/td>\n1,936<\/td>\n<\/tr>\n
     Merchandise inventories<\/td>\n14,531<\/td>\n13,925<\/td>\n<\/tr>\n     Other current assets<\/td>\n1,040<\/td>\n890<\/td>\n\n
       Total current assets<\/td>\nSingle line<\/span>\n19,810Double line<\/span><\/td>\nSingle line<\/span>\n18,529Double line<\/span><\/td>\n<\/tr>\n
Net property and equipment<\/td>\n22,770<\/td>\n22,375<\/td>\n<\/tr>\n
Operating lease right-of-use assets<\/td>\n5,595<\/td>\n---<\/td>\n<\/tr>\n
Goodwill<\/td>\n2,254<\/td>\n2,252<\/td>\n<\/tr>\n
Other Assets<\/td>\n807<\/td>\n847<\/td>\n<\/tr>\n
          Total assets<\/td>\nSingle line<\/span>\n$     51,236\nDouble line<\/span><\/td>\nSingle line<\/span>\n$     44,003\nDouble line<\/span><\/td>\n<\/tr>\n
Category, <\/span>Liabilities and Stockholders' Equity<\/strong><\/td>\n<\/tr>\n
Subcategory, <\/span>Current liabilities:<\/td>\n<\/tr>\n
     Short term debt<\/td>\n$     974<\/td>\n$     1,339<\/td>\n<\/tr>\n
     Accounts payable<\/td>\n7,787<\/td>\n7,755<\/td>\n<\/tr>\n
     Accured salaries and related expenses<\/td>\n1,494<\/td>\n1,506<\/td>\n<\/tr>\n     Sales taxes payable<\/td>\n605<\/td>\n656<\/td>\n\n\n     Deferred revenue<\/td>\n2,116<\/td>\n1,782<\/td>\n\n\n     Income taxes payable<\/td>\n55<\/td>\n11<\/td>\n\n\n     Current installments of long-term debt<\/td>\n1,839<\/td>\n1,056<\/td>\n\n\n     Current operating lease liabilities<\/td>\n828<\/td>\n---<\/td>\n\n\n     Other accrued expenses<\/td>\n2,677<\/td>\n2,611<\/td>\n\n
       Total current liabilities<\/td>\nSingle line<\/span>\n18,375<\/td>\nSingle line<\/span>\n16,716<\/td>\n<\/tr>\n
<\/td>\nSingle line<\/span>\n<\/td>\nSingle line<\/span>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n \n\nThe next section of the balance sheet would be noncurrent liabilities:\n\n\n\n\n\n\n\n\n\n\n
       Total current liabilities<\/td>\nSingle line<\/span>\n18,375<\/td>\nSingle line<\/span>\n16,716<\/td>\n<\/tr>\n
Long-term debt, excluding current installments<\/td>\nSingle line<\/span>28,670<\/td>\nSingle line<\/span>26,807<\/td>\n<\/tr>\n
Long-term operating lease liabilities<\/td>\n5,066<\/td>\n---<\/td>\n<\/tr>\n
Deferred income taxes<\/td>\n706<\/td>\n491<\/td>\n<\/tr>\n
Other long-term liabilities<\/td>\n1,535<\/td>\n1,867<\/td>\n<\/tr>\n
          Total liabilities<\/td>\nSingle line<\/span>\n54,352<\/td>\nSingle line<\/span>\n45,881<\/td>\n<\/tr>\n
<\/td>\nSingle line<\/span><\/td>\nSingle line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n \n\n\nAs you may have guessed, comparing total assets to total liabilities, owners\u2019 equity for The Home Depot is actually a deficit. You\u2019ll study the individual aspects of corporate equity in a later module, but for now, just notice that:\n\n\n\n\n\n\n\n\n\n\n\n\n
THE HOME DEPOT INC.\nCONSOLIDATED BALANCE SHEET\n<\/caption>\n
in millions, except per share data<\/em><\/th>\nFebruary 2, 2020<\/th>\nFebruary 3, 2019<\/th>\n<\/tr>\n<\/thead>\n
Common stock, par value $0.05; authorized 10,000 shares; issued: 1,786 shares at February 2, 2020 and 1,782 shares at February 3, 2019; Outstanding: 1,077 shares at February 2, 2020 and 1,105 shares at February 3, 2019<\/td>\n89<\/td>\n89<\/td>\n<\/tr>\n
Paid-in capital<\/td>\n11,001<\/td>\n10,578<\/td>\n<\/tr>\n
Retained earnings<\/td>\n51,729<\/td>\n46,423<\/td>\n<\/tr>\n
Accumulated other comprehensive loss<\/td>\n(739)<\/td>\n(772)<\/td>\n<\/tr>\n
Treasury stock, at cost, 709 shares at February 2, 2020 and 677 shares at February 3,2019<\/td>\n(65,196)<\/td>\n(58,196)<\/td>\n<\/tr>\n
          Total stockholders' (deficit) equity<\/td>\nSingle line<\/span>\n(3,116)<\/td>\nSingle line<\/span>\n(1,878)<\/td>\n<\/tr>\n
          Total liabilities and stockholders' equity<\/td>\nSingle line<\/span>\n$     51,236\nDouble line<\/span><\/td>\nSingle line<\/span>\n$     44,003\nDouble line<\/span><\/td>\n<\/tr>\n
Note <\/span>See accompanying notes to consolidated financial statements<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n \n\n\nNotice that total liabilities (current and noncurrent) and owners\u2019 equity (called stockholders\u2019 equity for a corporation) of $51.236 billion is equal to total assets of $51.236 billion.\n","rendered":"

What you will learn to do: Illustrate proper reporting of current liabilities<\/h2>\n

As we discussed earlier, the reason current assets are reported on a classified balance sheet separately from noncurrent assets is so that analysts and investors can easily compare current assets to current liabilities.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
THE HOME DEPOT INC.
\nCONSOLIDATED BALANCE SHEET
\n<\/caption>\n
in millions, except per share data<\/em><\/th>\nFebruary 2, 2020<\/th>\nFebruary 3, 2019<\/th>\n<\/tr>\n<\/thead>\n
Category, <\/span>Assets<\/strong><\/td>\n<\/tr>\n
Subcategory, <\/span>Current Assets:<\/td>\n<\/tr>\n
     Cash and cash equivalents<\/td>\n$     2,133<\/td>\n$     1,778<\/td>\n<\/tr>\n
     Receivables, net<\/td>\n2,106<\/td>\n1,936<\/td>\n<\/tr>\n
     Merchandise inventories<\/td>\n14,531<\/td>\n13,925<\/td>\n<\/tr>\n<\/tbody>\n
       Total current assets<\/td>\nSingle line<\/span>
\n19,810Double line<\/span><\/td>\n		Single line<\/span>
\n18,529Double line<\/span><\/td>\n<\/tr>\n
Net property and equipment<\/td>\n22,770<\/td>\n22,375<\/td>\n<\/tr>\n
Operating lease right-of-use assets<\/td>\n5,595<\/td>\n—<\/td>\n<\/tr>\n
Goodwill<\/td>\n2,254<\/td>\n2,252<\/td>\n<\/tr>\n
Other Assets<\/td>\n807<\/td>\n847<\/td>\n<\/tr>\n
          Total assets<\/td>\nSingle line<\/span>
\n$     51,236
\nDouble line<\/span><\/td>\n		Single line<\/span>
\n$     44,003
\nDouble line<\/span><\/td>\n<\/tr>\n
Category, <\/span>Liabilities and Stockholders’ Equity<\/strong><\/td>\n<\/tr>\n
Subcategory, <\/span>Current liabilities:<\/td>\n<\/tr>\n
     Short term debt<\/td>\n$     974<\/td>\n$     1,339<\/td>\n<\/tr>\n
     Accounts payable<\/td>\n7,787<\/td>\n7,755<\/td>\n<\/tr>\n
     Accured salaries and related expenses<\/td>\n1,494<\/td>\n1,506<\/td>\n<\/tr>\n
       Total current liabilities<\/td>\nSingle line<\/span>
\n18,375<\/td>\n		Single line<\/span>
\n16,716<\/td>\n<\/tr>\n
<\/td>\nSingle line<\/span>\n<\/td>\nSingle line<\/span>\n<\/td>\n<\/tr>\n<\/table>\n

 <\/p>\n

The next section of the balance sheet would be noncurrent liabilities:<\/p>\n\n\n\n\n\n\n\n\n\n
       Total current liabilities<\/td>\nSingle line<\/span>
\n18,375<\/td>\n		Single line<\/span>
\n16,716<\/td>\n<\/tr>\n
Long-term debt, excluding current installments<\/td>\nSingle line<\/span>28,670<\/td>\nSingle line<\/span>26,807<\/td>\n<\/tr>\n
Long-term operating lease liabilities<\/td>\n5,066<\/td>\n—<\/td>\n<\/tr>\n
Deferred income taxes<\/td>\n706<\/td>\n491<\/td>\n<\/tr>\n
Other long-term liabilities<\/td>\n1,535<\/td>\n1,867<\/td>\n<\/tr>\n
          Total liabilities<\/td>\nSingle line<\/span>
\n54,352<\/td>\n		Single line<\/span>
\n45,881<\/td>\n<\/tr>\n
<\/td>\nSingle line<\/span><\/td>\nSingle line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

As you may have guessed, comparing total assets to total liabilities, owners\u2019 equity for The Home Depot is actually a deficit. You\u2019ll study the individual aspects of corporate equity in a later module, but for now, just notice that:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
THE HOME DEPOT INC.
\nCONSOLIDATED BALANCE SHEET
\n<\/caption>\n
in millions, except per share data<\/em><\/th>\nFebruary 2, 2020<\/th>\nFebruary 3, 2019<\/th>\n<\/tr>\n<\/thead>\n
Common stock, par value $0.05; authorized 10,000 shares; issued: 1,786 shares at February 2, 2020 and 1,782 shares at February 3, 2019; Outstanding: 1,077 shares at February 2, 2020 and 1,105 shares at February 3, 2019<\/td>\n89<\/td>\n89<\/td>\n<\/tr>\n
Paid-in capital<\/td>\n11,001<\/td>\n10,578<\/td>\n<\/tr>\n
Retained earnings<\/td>\n51,729<\/td>\n46,423<\/td>\n<\/tr>\n
Accumulated other comprehensive loss<\/td>\n(739)<\/td>\n(772)<\/td>\n<\/tr>\n
Treasury stock, at cost, 709 shares at February 2, 2020 and 677 shares at February 3,2019<\/td>\n(65,196)<\/td>\n(58,196)<\/td>\n<\/tr>\n
          Total stockholders’ (deficit) equity<\/td>\nSingle line<\/span>
\n(3,116)<\/td>\n		Single line<\/span>
\n(1,878)<\/td>\n<\/tr>\n
          Total liabilities and stockholders’ equity<\/td>\nSingle line<\/span>
\n$     51,236
\nDouble line<\/span><\/td>\n		Single line<\/span>
\n$     44,003
\nDouble line<\/span><\/td>\n<\/tr>\n
Note <\/span>See accompanying notes to consolidated financial statements<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

Notice that total liabilities (current and noncurrent) and owners\u2019 equity (called stockholders\u2019 equity for a corporation) of $51.236 billion is equal to total assets of $51.236 billion.<\/p>\n","protected":false},"author":6,"menu_order":17,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Introduction to Reporting Current Liabilities\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":277,"module-header":"","content_attributions":[{"type":"original","description":"Introduction to Reporting Current Liabilities","author":"Joseph Cooke","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/294"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/users\/6"}],"version-history":[{"count":0,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/294\/revisions"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/parts\/277"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/294\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/media?parent=294"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=294"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/contributor?post=294"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/license?post=294"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}