On December 31, 2011, Hornsby Corporation had $1.2 million of short term debt in the form of
Question:
On December 31, 2011, Hornsby Corporation had $1.2 million of short term debt in the form of notes payable due on February 2, 2012. On January 21, 2012, the company issued 25,000 common shares for $38 per share, receiving $950,000 in proceeds after brokerage fees and other costs of issuance. On February 2, 2012, the proceeds from the sale of the shares, along with an additional $250,000 cash, are used to liquidate the $1.2-million debt. The December 31, 2011 balance sheet is issued on February 23, 2012.
Instructions
(a) Assuming that Hornsby follows private enterprise GAAP, show how the $1.2 million of short-term debt should be presented on the December 31, 2011 balance sheet, including the note disclosure.
(b) Assuming that Hornsby follows IFRS, explain how the $1.2 million of short-term debt should be presented on the December 31, 2011 balance sheet.
Balance SheetBalance 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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
a Note 1 Shortterm debt refinanced As of December 31 2011 the company had notes payable totalling 12...View the full answer
Intermediate Accounting
ISBN: 978-0470161012
9th Canadian Edition, Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
