Question

Suppose a hotel has $40,000 of long-term debt at year end. Of this amount, $10,000 must be repaid within the next year. Which of the following statements is true? Select one: O a. The classified balance sheet would show $30,000 of long-term debt under the heading "Long-term liabilities." o b. THE classified balance sheet would show $30,000 of long-term debt under the heading "Current liabilities." O c. The classified balance sheet would show $40,000 of long-term debt under the heading "Long-term liabilities." O d. The classified balance sheet would show $40,000 of long-term debt under the heading "Current liabilities." Previous page Next page

Answer 1

The answer has been presented in the supporting sheet. FOr detailed answer refer to the supporting sheet.

1 Answer 2 Part 1) 3 The correct answer is 4 a. The classified Balance Sheet would show $ 30000 of long term debt under the heading Long Term Liabilities 6 Explanation 7 Any liability which is to be paid after one year will be classified as long term debt 8 = Total debt - current liabilities = 40000 - 10000 10 = $ 30000 9 12 Part 2) 13 The correct answer is 14 b) $ 4000 16 Interest expenses 17 = note payable * interest rate * 60/360 18 = 300000 * 8% *60/360 19 = $ 4000 20 21 Part 3) 22 The correct answer is 23 b. $ 9.0 million 25 Repaid parts on balance sheet 26 = Net sales *repaid percentage 27 = 180 * 5% 28 = 9 million 29