Preparing a partial balance sheet


On December 31, 2012, Santana Company has $7,095,200 of short-term debt in the form of notes payable to Golden State Bank due in 2013. On January 28, 2013, Santana enters into a refinancing agreement with Golden that will permit it to borrow up to 57% of the gross amount of its accounts receivable. Receivables are expected to range between a low of $5,116,000 in May to a high of $8,155,000 in October during the year 2013. 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 2017. Santana's December 31, 2012, balance sheet is issued on February 15, 2013.

Prepare a partial balance sheet for Santana at December 31, 2012, showing how its $7,095,200 of short-term debt should be presented.

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Accounting Basics: Preparing a partial balance sheet
Reference No:- TGS038243

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