A Closer Look at Financial Statements

a. While analyzing the financial statements of the Morris Company, you notice that a $50,000 note payable to the First National Bank was listed as a long-term debt last year but it is listed as a current liability this year.

1. What would cause Morris Company to report the note as a Current liability?

2. If the note payable has a 6 percent annual interest rate and Morris Company reported total interest expense of

$7,000 on all liabilites last year, how much would you expect to be reported as interest expense next year and in subsequent years?

. The income statement for Morris Company includes both net income and an earnings per share amount. What information is provided in the earnings per share number that is not provided by net income?
. How can an analysis of multiple-year financial statements provide an investor with additional insight into the desirability of investing in Morris Company?