1) On December 31, 2016, Largo Company had a P750,000 note payable outstanding due July 31,2017. The entity planned to refinance the note by issuing long-term bonds. Because the entity temporarily had excess cash, it prepaid P250,000 of the note on January 15, 2017. In February 2017, the entity completed a P1,500,000 bond offering. The entity will use the bond offering proceeds to repay the note payable at maturity. On March 31, 2017, the 2016 financial statements were authorized for issue.What amount of the note payable should be included in current liabilities on December 31, 2016? a. 750,000 b. 500,000 c. 250,000 d. 0

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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1) On December 31, 2016, Largo Company had a P750,000 note payable outstanding due July 31,2017. The entity planned to refinance the note by issuing long-term bonds.
Because the entity temporarily had excess cash, it prepaid P250,000 of the note on January 15, 2017.
In February 2017, the entity completed a P1,500,000 bond offering. The entity will use the bond offering proceeds to repay the note payable at maturity.
On March 31, 2017, the 2016 financial statements were authorized for issue.What amount of the note payable should be included in current liabilities on December 31, 2016?
a. 750,000
b. 500,000
c. 250,000
d. 0
 
2) Dean company has a P2,000,000 note payable due June 30, 2017. On December 31, 2015, the entity signed an agreement to borrow up to P2,000,000 to refinance the note payable on a long-term basis.
 
The financing agreement called for borrowing not to exceed 80% of the collateral the entity was providing.
 
On December 31, 2016, the value of the collateral was P1,500,000.
 
On December 31, 2016, what amount of the note payable should be reported as current liability?
a. 2,000,000
b. 1,500,000
c. 800,000
d. 500,000
 
3)Gar Company reported the following liability account balances on December 31, 2018:
Accounts payable 1,900,000
Bonds payable 3,400,000
Discount on bonds payable 200,000
Deferred tax liability 400,000
Dividends payable 500,000
Income tax payable 900,000
Note payable, due January 31, 2020 600,000
 
On December 31, 2019, what total amount should be reported as current liabilities?
 
a. 7,100,000
b. 4,300,000
c. 3,900,000
d. 4,100,000
 

 
 
 
 
 
 
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