Question

Problem 13-3 Current noncurrent classification of debt [LO13-1, 13-4] The balance sheet at December 31, 2018. for Nevada Harvester Corporation includes the abilities 3.13% bonds with a face amount of $25 on were issued for 525 million on October 11, 2009 The bonds mature on October 2029. Bondholders have the option of calling demanding payment on the bonds on October 31, 2019. at a redemption price of $25 million Market conditions are such that the cale not expected to be exercised b. Management intended to refinance $9.4 million of its 14 notes that matures May 2019: In early March, prior to the actual issuance of the 2018 financial statements Nevada Harvester negotiated a line of credit with a commercial bank for up to $6.2 on any time during 2019 Any borrowings wil matute two years from the date of borrowing Noncallable 15% bonds with a face amount of 5240 million were issued for $240 million on September 30, 1996. The bonds mature on September 30, 2019. Sufficient cash is expected to be available to retire the bonds at maturity d. A $15 million bank loan is payable on October 31, 2024. The bank has thenght to demand payment after any fiscal year end in which Nevada Harvester's ratio of current assets to current liabilities fals below a contractual minimum of 17 to land remains so for six months. That ratio was 145 on December 31, 2018 due primarily to an intentional temporary decline in inventory levels Normal inventory levels will be reestablished during the first quarter of 2019 Required: 1. For each liability listed above, what amount will be reported as a current ability on the December 31, 2018 balance sheet? 2. Prepare the librity section of a classified balance sheet for Nevada Harvester at December 31, 2018 Accounts payable and accruals are 529 million Complete this question by entering your answers in the tabs below. Required Required 2 For each Gability listed above, what amount will be reported as a current listy on the December 31, 2018 balance sheet? Enter yourwers in millions (ie, 5,500,000 should be entered as 5.5).) 5 Required 2 >

Answer 1

Answers 0.-The amount that will be reports as liability on the balance sheet for Each liabilirly : scenario cuarent liability ffinmiliares $25 3. 0 9.4 million $6.2mili $94_ The Liability section of a classified balance. Sheet Nevada Harvester Corporation balance sheet (partial) ALDU 31 2018 in millions) 29 curent liabilitics Accounts payable & aceruali ut noles payable duc may shiq Cuprintly matning portion. I longterm debut 13.4. bonds dur oct. 3 libida redeemable. moct 31, 2019 49 (15% bonds due sept 30, 2019 8112

Total current liabilitics : long term Debt 6.2 Ly ..no tes_payabk dus. may 2017 1. bank loan duc.oct 3112024 Total long team Jabukiting | Total liabilities. 312 $ 10214