On December 31, 2011, Zimmer Corporation has $7.9 million of short term debt in the form of


On December 31, 2011, Zimmer Corporation has $7.9 million of short term debt in the form of notes payable that will be due periodically in 2012 to Provincial Bank. On January 28, 2012, Zimmer enters into a refinancing agreement with the bank that will permit it to borrow up to 60% of the gross amount of its accounts receivable. Receivables are expected to range between a low of $5.7 million in May and a high of $7 million in October during the year 2012. The interest cost of the maturing short-term debt is 15%, and the new agreement calls for a fluctuating interest rate at 1% above the prime rate on notes due in 2013. Zimmer's December 31, 2011 balance sheet is issued on February 15, 2012.


(a) Assuming that Zimmer follows private enterprise GAAP, prepare a partial balance sheet for Zimmer Corporation at December 31, 2011, that shows how its $7.9 million of short-term debt should be presented, including any necessary note disclosures.

(b) Assuming that Zimmer follows IFRS, explain how the $7.9 million of short-term debt should be presented on the December 31, 2011 balance sheet.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For  answer-question

Intermediate Accounting

ISBN: 978-0470161012

9th Canadian Edition, Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.

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