Question

Multiple Choice (please pick the 1. Josie Posie Corp publishes annual 31 of each following year. On Deco 5 year 6% note payable due June 1, 2016 vice (please pick the best answer for each publishes annual financial statements for the year ending Dec 31 on March wing year. On Dec 31, 2015, Josie Posie has the following current debts: $ 100,000 To year 8% bonds payable due September 30, 2016 1,000,000 on February 1, 2016 Josie Posie signs a 1 year Note Payable for $60,000 with Vanessa Bank. The proceeds of the note will be used to pay a portion the 5-year $100,000 note due June 1. On March 1, Josie Posie issues $500,000 in common stock with the intent of using the proceeds to pay a portion of the $1,000,000 bond payable due Sept 30. On April 10, 2016, Josie Posie signs a $400,000 long term note payable due April 1, 2020 and plans to use the proceeds to pay for a portion of the $1,000,000 note due Sept 30. How much should Josie Posie report for current liability of the $100.000 note and $1,000,000 bond payables on the Dec 31, 2015 balance sheet? a. $1,100,000 b. $1,040,000 c. $540,000 d. $140,000 e. $0

Answer 1

Solution: The Answer is a) $1,100,000

Explanation:

	Amount $	Explanation
6% Notes Payable	$            100,000	it is current liability because of it is due within next 12 months, On June 1,2016
8% Bonds Payable	$        1,000,000	it is current liability because of it is due within next 12 months, On September 30,2016
Total	$        1,100,000

Notes:

1) Remaining issues such as

a) Notes payable signed

b) Common stock issued

c) Long term Notes payable singed are occurred after December 31st, 2015. So, those transaction does not effect current liability on December 31st, 2015.

2) So, Remaining options are Incorrect.