Question
On December 31, 2020, Unger Co., has $4,000,000 of short-term notes payable due on February 14, 2021. On February 2, 2021, Unger arranged a long-term
On December 31, 2020, Unger Co., has $4,000,000 of short-term notes payable due on February 14, 2021. On February 2, 2021, Unger arranged a long-term loan which is based on borrowing against 70% of its inventory cost. Currently the inventory account shows a balance of $3,000,000. It intends to use these proceeds to pay the short-term notes payable due on February 14, 2021 and to pay the balance of it in cash. The amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2020 balance sheet that is issued on March 5, 2021 under ASPE, and IFRS are
a.ASPE: $1,900,000 ; IFRS: 1,900,000
b.ASPE: $1,900,000; IFRS:4,000,000
c.ASPE: $4,000,000; IFRS:4,000,000.
d.ASPE: $0 ; IFRS: 0
e.ASPE: 1,000,000, IFRS: $4,000,000.
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