In its Dec. 31, 2020 statement of financial position, how much current liabilities should be reported? (SEE ATTACHED FOR PROBLEM)CHOICES a. P 4,000,000b. P 3,640,000c. P 3,000,000d. P 1,500,000 On December 31, 2020, EC Company provided the following information on Dec. 31, 2020Accounts payable, unadjustedBonds payablePremium on bonds payable1,500,000.004,000,000.00125,000.00Bond issue costs25,000.00Notes Payable - 8% issued on Jan 14, 2019, maturing on Jan 14, 2021Notes Payable - 9%s issued on May 9, 2019, maturing on May 9, 2021Notes Payable - 10%s issued on Nov. 1, 2018 due in 10 years750,000.001,000,000.002,000,000.00Additional information:- Goods were in transit to EC from a vendor on Dec. 31, 2020. The invoice cost was P 80,000The goods were shipped FOB Shipping Point on Dec. 31, 2020 and were received Jan. 2, 2021- Goods shipped FOB Destination on Dec. 21, 2020 from a vendor to EC, were received onJan. 6, 2021. The invoice cost P 90,000- On Dec. 27, 2020, EC wrote and recorded checks totaling P 60,000 which were mailedon Jan. 10, 2021-Under the loan agreement for the 8% Notes Payable, the entity has the discretion torefinance the obligation for at least twelve months after Dec. 31, 2020-On Dec. 31, 2020, the entity consummated a noncancelable agreement with the lenderto refinance the 9% Notes Payable on a long-term basis. The financing agreement called forborrowing not to exceed 80% of the value of the collateral the entity was providing. Thevalue of the collateral was P800,000- Part of the terms of the Note payable 10% is for EC to appropriate a fixed amount outof its accumulated profits and losses annually until the amount of appropriation hasequaled the face of the obligation. As of Dec. 31, 2020, EC has yet to comply with theloan agreement- The financial statements were issued on Mar. 31, 2021

Non-current liabilities, as the name suggests, are those obligations which an entity is not required…

Answered: In its Dec. 31, 2020 statement of…

Principles of Accounting Volume 1

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ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6PB: Edward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

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^{In its Dec. 31, 2020 statement of financial position, how much current liabilities should be reported?}

^{(SEE ATTACHED FOR PROBLEM)}

CHOICES

a. P 4,000,000
b. P 3,640,000
c. P 3,000,000
d. P 1,500,000

On December 31, 2020, EC Company provided the following information on Dec. 31, 2020
Accounts payable, unadjusted
Bonds payable
Premium on bonds payable
1,500,000.00
4,000,000.00
125,000.00
Bond issue costs
25,000.00
Notes Payable - 8% issued on Jan 14, 2019, maturing on Jan 14, 2021
Notes Payable - 9%s issued on May 9, 2019, maturing on May 9, 2021
Notes Payable - 10%s issued on Nov. 1, 2018 due in 10 years
750,000.00
1,000,000.00
2,000,000.00
Additional information:
- Goods were in transit to EC from a vendor on Dec. 31, 2020. The invoice cost was P 80,000
The goods were shipped FOB Shipping Point on Dec. 31, 2020 and were received Jan. 2, 2021
- Goods shipped FOB Destination on Dec. 21, 2020 from a vendor to EC, were received on
Jan. 6, 2021. The invoice cost P 90,000
- On Dec. 27, 2020, EC wrote and recorded checks totaling P 60,000 which were mailed
on Jan. 10, 2021
-Under the loan agreement for the 8% Notes Payable, the entity has the discretion to
refinance the obligation for at least twelve months after Dec. 31, 2020
-On Dec. 31, 2020, the entity consummated a noncancelable agreement with the lender
to refinance the 9% Notes Payable on a long-term basis. The financing agreement called for
borrowing not to exceed 80% of the value of the collateral the entity was providing. The
value of the collateral was P800,000
- Part of the terms of the Note payable 10% is for EC to appropriate a fixed amount out
of its accumulated profits and losses annually until the amount of appropriation has
equaled the face of the obligation. As of Dec. 31, 2020, EC has yet to comply with the
loan agreement
- The financial statements were issued on Mar. 31, 2021

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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