2. The ledger of INFIRM SICK Co. as of December 31, 20x1 includes the following: 10% Note payable 12% Note payable 14% Mortgage note payable Interest payable 80,000 120,000 60,000 Additional information: - INFIRM Co.'s financial statements were authorized for issue on April 15, 20x2. - The 10% note payable is due on July 1, 20x2 and pays semi-annual interest every July 1 and December 31. On January 28, 20x2, INFIRM Co. entered into a refinancing agreement with a bank to refinance the entire note by issuing a long-term obligation. - The 12% note payable is due on March 31, 20x2 and pays annual interest every March 31. On January 31, 20x2, INFIRM Co. extended the maturity of the note to March 31, 20x3 under the existing loan agreement. The extension of maturity date is at the option of INFIRM. - The 14% mortgage note is due on December 31, 20x9. Per agreement with the creditor, INFIRM is to pay quarterly interests on the note, failure to do so will render the note payable on demand. INFIRM failed to pay the 3rd and 4th quarterly interests on the note during 20x1. How much is the total current liabilities? a. 119,000 b. 155,000 c. 172,000 d. 189.000

2. The ledger of INFIRM SICK Co. as of December 31, 20x1 includes the following: 10% Note payable 12% Note payable 14% Mortgage note payable Interest payable 80,000 120,000 60,000 Additional information: - INFIRM Co.'s financial statements were authorized for issue on April 15, 20x2. - The 10% note payable is due on July 1, 20x2 and pays semi-annual interest every July 1 and December 31. On January 28, 20x2, INFIRM Co. entered into a refinancing agreement with a bank to refinance the entire note by issuing a long-term obligation. - The 12% note payable is due on March 31, 20x2 and pays annual interest every March 31. On January 31, 20x2, INFIRM Co. extended the maturity of the note to March 31, 20x3 under the existing loan agreement. The extension of maturity date is at the option of INFIRM. - The 14% mortgage note is due on December 31, 20x9. Per agreement with the creditor, INFIRM is to pay quarterly interests on the note, failure to do so will render the note payable on demand. INFIRM failed to pay the 3rd and 4th quarterly interests on the note during 20x1. How much is the total current liabilities? a. 119,000 b. 155,000 c. 172,000 d. 189.000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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