On December 31, 2007 Atwood Table Company has $8 million of short-term notes payable owed to City

Question:

On December 31, 2007 Atwood Table Company has $8 million of short-term notes payable owed to City National Bank. On February 1, 2008 Atwood negotiates a revolving credit agreement providing for unrestricted borrowings up to $6 million. Borrowings will bear interest at 1% over the prevailing prime rate, will have stated maturities of 120 days, and will be continuously renewable for 120-day periods for four years. Atwood plans to refinance as much as possible of the notes outstanding with the proceeds available from this agreement. Assume that Atwood’s December 31, 2007 year-end financial statements are issued on March 30, 2008.

Required

Prepare a partial December 31, 2007 balance sheet for Atwood Table Company showing how the $8 million short-term debt should be reported.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...