Excluding a short-term obligation from current liabilities can be done when:- the liability is contractually due...
- Excluding a short-term obligation from current liabilities can be done when:-
- the liability is contractually due to be settled more than one year after the balance sheet date.
- the company enters into a financing agreement that permits the company to refinance the debt on a long-term basis.
- the company has a contractual right to defer settlement of the liability for at least one year after the balance sheet date.
- all of these answers are correct.
Note:- answer (B) & (C) are wrong. So, it's either (A) or (D)
Homework Answers
Option (d) is correct
All the given options are correct
Current liabilities are the liabilities which are expected to be settled or paid within one accounting period. If any liability is due to be paid in more than one accounting year then it is excluded from current liabilities.
In option (a), liability will be settled in more than one accounting year, so it is not a current liability.
In options (b) and (c), there is a contractual right or financing agreement to settle the obligation beyond one year, so these can be excluded from the current liabilities.
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Excluding a short-term obligation from current
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help!!!
Under U.S. GAAP. liabilities payable within one year can be excluded from current liabilities only if Multiple Choice The business intends to refinance the obligations on a long term basis C ) The business has the demonstrated ability to refinance the obligations on a long term basis O The business has the intent and the aby to refinance the obligation on a long term basis O L e s payable within one year always must be classified as current...
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Transit Airlines provides regional jet service in the Mid-South. The following is information on liabilities of Transit at December 31, 2021. Transit’s fiscal year ends on December 31. Its annual financial statements are issued in April. 1. Transit has outstanding 6.2% bonds with a face amount of $63 million. The bonds mature on July 31, 2027. Bondholders have the option of calling (demanding payment on) the bonds on July 31, 2022, at a redemption price of $63 million. Market conditions...
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Tony and Suzie graduate from college in May 2021 and begin developing their new business. They begin by offering clinics for basic outdoor activities such as mountain biking or kayaking. Upon developing a customer base, they'll hold their first adventure races. These races will involve four-person teams that race from one checkpoint to the next using a combination of kayaking, mountain biking, orienteering, and trail running. In the long run, they plan to sell outdoor gear and develop a ropes...
Balance Sheet Ratios for 2004 and 2005
Calculate the Current Ratio
Calculate the Book Debt to Equity Ratio
Calculate the Market Debt to Equity Ratio (Use Book
Value of Debt and Market Capitalization using basic shares
outstanding and assuming stock prices of $56.89/share in 2005 and
$58.93/share in 2004.)
Calculate the Enterprise Value of Clorox using the
Market Capitalization from above.
Yours ended June 30 (dollars in milions, except per share amounts) 2005 2004 2003 $ Net sales Cost of...
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