Question

At December 31, 2020, Sage Hill Incorporated has a bond payable due September 1, 2021, with a carrying value of $1,786,000 (based on amortized cost) and a current value of $1,952,000. The interest payable as at December 31, 2020, is $83,000. Show how the above amounts should be presented on the December 31, 2020 SFP, and with the proper classifications. The company uses amortized cost.

Sage Hill Incorporated Statement of Financial Position (Partial) choose the accounting period

select an opening section name

enter a balance sheet item		$enter a dollar amount
enter a balance sheet item		$enter a dollar amount

Answer 1

Sage Hill Incorporated Statement of Financial Position (Partial) As at December 31, 2020 Liabilities and Shareholders' Equity Current Liabilities: Interest Payable $83,000 Current Portion of Bonds Payable $1,786,000 --> Ref: NOTE --> As it falls due by next year, it is a current liability. NOTE: Financial statements of a company include income statement, statement of changes in shareholders' equity, balance sheet and statement of cash flows. Statement of Financial Position explains financial position of the company as at last day of the reporting period in terms of net assets held and net liabilities owed by the company. Difference between total net assets and total net liabilities is the networth of the company. Net worth of the company is technically termed as stockholders' equity wherein data related to amount & class of equity capital contributed to the company, retained earnings till the last day of reporting period, reduced by treasury stock held, if any will be reported. Assets will be classified as current assets and non-current assets. If assets' life time is estimated to be one year or less from the last day of reporting period, they are current assets, otherwise, they are non-current assets. Similarly, if the liabilities are payable within one year from last day of reporting period, they are current liabilities, otherwise, they are long-term liabilities. Liabilities are firm's obligations that fall due either within one year or after one year from the date of financial statement but for the goods or services received already from vendors on account before the date of financial statement.