Question

At the financial statement date of December 31, 2012, the liabilities outstanding of Packard Corporation included the following:
1) Cash dividends on common stock, $40,000, payable on Jan. 15, 2013.
2) Note payable to Galena State bank, $470,000, due January 20, 2013
3) Serial bonds, $1,400,000 of which $350,000 mature during 2013
4) Note payable to Third National Bank, $300,000 due Jan. 27, 2013
The following transactions occurred early in 2013:
Jan. 15: Cash dividends on common stock were paid
Jan. 20: Note payable to Galena State Bank was paid
Jan. 25: The Corporation entered into a financing agreement with Galena State Bank, enabling it to borrow up to $500,000 at anytime through the end of 2015. Amounts borrowed under the agreement would bear interest at 1% above the bank’s prime rate and would mature 3 years from the date of the loan. The corporation immediately borrowed $400,000 to replace the cash used in paying its January 20 note to the bank
Jan. 26: 40,000 shares of common stock were issued for $350,000. $300,000 of the proceeds was used to liquidate the note payable to Third National Bank.

Instructions:
Prepare a partial balance sheet for Packard Corp., showing the manner in which the above liabilities should be presented at December 31, 2012. The liabilities should be properly classified between current and long-term and appropriate note disclosure should be included.



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  • CreatedSeptember 19, 2013
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