At the financial statement date of December 31, 2019, the liabilities outstanding of Kingston Corporation included the following: 1. Cash dividends on ordinary shares, £60,000, payable on January 15, 2019. 2. Note payable to Baker Bank, £470,000, due January 20, 2019. 3. Serial bonds, $1,000,000, of which £250,000 mature during 2019. 4. Note payable to Third International Bank, £300,000, due January 27, 2019. The following transactions occurred early in 2019: January 15: The cash dividends on ordinary shares were paid. January 20: The note payable to Baker Bank was paid. January 25: The corporation entered into a financing agreement with Baker Bank, enabling it to borrow up to £500,000 at any time through the end of 2021. Amounts borrowed under the agreement would bear interest at 1% above the bank's prime rate and would mature 3 years from the date of the loan. The corporation immediately borrowed £400,000 to replace the cash used in paying its January 20 note to the bank. January 26: 40,000 ordinary shares were issued for £350,000. £300,000 of the proceeds was used to liquidate the note payable to Third International Bank. February 1: The financial statements for 2019 were issued. Required: Prepare a partial statement of financial position for Kingston Corporation, showing the manner inwhich the above liabilities should be presented at December 31, 2019. The liabilities should be properly classified between current and non-current, and appropriate note disclosure should be included, and give explanation!
At the financial statement date of December 31, 2019, the liabilities outstanding of Kingston Corporation included the following: 1. Cash dividends on ordinary shares, £60,000, payable on January 15, 2019. 2. Note payable to Baker Bank, £470,000, due January 20, 2019. 3. Serial bonds, $1,000,000, of which £250,000 mature during 2019. 4. Note payable to Third International Bank, £300,000, due January 27, 2019. The following transactions occurred early in 2019: January 15: The cash dividends on ordinary shares were paid. January 20: The note payable to Baker Bank was paid. January 25: The corporation entered into a financing agreement with Baker Bank, enabling it to borrow up to £500,000 at any time through the end of 2021. Amounts borrowed under the agreement would bear interest at 1% above the bank's prime rate and would mature 3 years from the date of the loan. The corporation immediately borrowed £400,000 to replace the cash used in paying its January 20 note to the bank. January 26: 40,000 ordinary shares were issued for £350,000. £300,000 of the proceeds was used to liquidate the note payable to Third International Bank. February 1: The financial statements for 2019 were issued. Required: Prepare a partial statement of financial position for Kingston Corporation, showing the manner inwhich the above liabilities should be presented at December 31, 2019. The liabilities should be properly classified between current and non-current, and appropriate note disclosure should be included, and give explanation!
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:At the financial statement date of December 31, 2019, the liabilities outstanding of Kingston
Corporation included the following:
1. Cash dividends on ordinary shares, £60,000, payable on January 15, 2019.
2. Note payable to Baker Bank, £470,000, due January 20, 2019.
3. Serial bonds, $1,000,000, of which £250,000 mature during 2019.
4. Note payable to Third International Bank, £300,000, due January 27, 2019.
The following transactions occurred early in 2019:
January 15: The cash dividends on ordinary shares were paid.
January 20: The note payable to Baker Bank was paid.
January 25: The corporation entered into a financing agreement with Baker Bank, enabling it to
borrow up to £500,000 at any time through the end of 2021. Amounts borrowed under the agreement
would bear interest at 1% above the bank's prime rate and would mature 3 years from the date of the
loan. The corporation immediately borrowed £400,000 to replace the cash used in paying its January
20 note to the bank.
January 26: 40,000 ordinary shares were issued for £350,000. £300,000 of the proceeds was used to
liquidate the note payable to Third International Bank.
February 1: The financial statements for 2019 were issued.
Required: Prepare a partial statement of financial position for Kingston Corporation, showing the
manner inwhich the above liabilities should be presented at December 31, 2019. The liabilities should
be properly classified between current and non-current, and appropriate note disclosure should be
included, and give explanation!
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