1. PPI's finance team had several options to raise the funds for the needed inventory. They could...
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Question:
- 1. PPI's finance team had several options to raise the funds for the needed inventory. They could have sold stock, issued a long-term note, purchased the inventory on credit, or issued other financing.
- How did their choice to issue a short-term note affect their financial position? Do you agree that this was the best of the available options? If so, please explain why it was the best available option. If not, please explain which other option you feel would have been the best and why. While the purchase of inventory was properly recorded, no journal entries have yet been made for the note.
- 2. PPI’s Director of Finance argued that they should wait until they repaid the obligation to record the interest, after all it was technically a non-interest bearing note and the amount of interest was very small.
- What would have been the possible consequences of this option and who is likely to have been affected.
Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
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