Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The bank loan principal to be paid in Year 2008 is $38,260. A classified balance sheet means that current assets and current liabilities are expected
The bank loan principal to be paid in Year 2008 is $38,260. | ||||||||||||||
A classified balance sheet means that current assets and current liabilities are expected to be consumed or paid of in one (1) year or less. | ||||||||||||||
Long term assets and long term liabilities have a "life" or expected conversion to cash in more than one (1) year. | ||||||||||||||
In this case, all of you are doing is MOVING $38,260 from the long term liability account called "Bank loan payable" to | ||||||||||||||
a new account called "Bank loan payable - current portion": | ||||||||||||||
This new account has been added to the bottom of the accountant's worksheet by me (to assist you). | ||||||||||||||
By the way, where did I get the account names like Bank loan payable - current portion; I made it up. These are the books and records | ||||||||||||||
of our company and we get to name the accounts as we see fit (within reason) so that they are clear to the readers of the financial statements. | ||||||||||||||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started