Refinancing agreement: Entity C’s liabilities as of December 31, 20x1 (current year-end) include the ff:P10,000,000, 8-year loan maturing on December 31, 20x2. Entity C intends to refinance this liability on a long-term basis on February 2, 20x2. Entity C’s 20x1 financial statements were authorized for issue on March 31, 20x2P6,000,000 loan that is payable on demand. There is no indication as of December 31, 20x1 that the creditor will demand repayment within the next 12 months.P14,000,000 loan due on December 31, 20x9. Entity C breached a loan provision accelerating the repayment of this loan within the next 12 months. However, on January 12, 20x2, the creditor granted entity C a 12-month grace period to rectify the breach, within which the creditor will not demand immediate payment.Requirement: Compute for the total current liabilities as of December 31, 20x1.

Computation of total current liabilities as of December 31, 20x1: Amount 8-year loan maturing…

Answered: Entity C’s liabilities as of December…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Refinancing agreement: Entity C’s liabilities as of December 31, 20x1 (current year-end) include the ff:

P10,000,000, 8-year loan maturing on December 31, 20x2. Entity C intends to refinance this liability on a long-term basis on February 2, 20x2. Entity C’s 20x1 financial statements were authorized for issue on March 31, 20x2
P6,000,000 loan that is payable on demand. There is no indication as of December 31, 20x1 that the creditor will demand repayment within the next 12 months.
P14,000,000 loan due on December 31, 20x9. Entity C breached a loan provision accelerating the repayment of this loan within the next 12 months. However, on January 12, 20x2, the creditor granted entity C a 12-month grace period to rectify the breach, within which the creditor will not demand immediate payment.

Requirement: Compute for the total current liabilities as of December 31, 20x1.

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