The 16-Bit Corporation, whose December 31, 2019 year-end financial statements were issued February 16, 2020, had...

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The 16-Bit Corporation, whose December 31, 2019 year-end financial statements were issued February 16, 2020, had...

The 16-Bit Corporation, whose December 31, 2019 year-end financial statements were issued February 16, 2020, had the following transactions.

For each transaction, indicate the amount that 16-Bit would show as a current liability on its December 31, 2019 balance sheet under US GAAP.

Indicate $ “0” if no amount would be shown as a current liability.

1.) 16-Bit owes $3,000,000 that is due on January 28, 2020. The completed a refinancing transaction for $2,500,000 prior to December 31, 2019 which allows for deferral of payment until January 28, 2025. The remainder of the balance remains due January 28, 2020.

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Answer 1

Answer #1

1.)

16-Bit would show as a current liability on its December 31, 2019 balance sheet

$ 500,000

=3000000-2500000

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Answer 2

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