The balance sheet at December for Nevada Harvester Corporation includes the liabilities listed below.
a bonds with a face amount of $ million were issued for $ million on October The bonds mature on October
Bondholders have the option of calling demanding payment on the bonds on October at a redemption price of
$ million. Market conditions are such that the call is not expected to be exercised.
b Management intended to refinance $ million of its notes that mature in May In early March, prior to the actual
issuance of the financial statements, Nevada Harvester negotiated a line of credit with a commercial bank for up to $
million any time during Any borrowings will mature two years from the date of borrowing.
c Noncallable bonds with a face amount of $ million were issued for $ million on September The bonds
mature on September Sufficient cash is expected to be available to retire the bonds at maturity.
d A $ million bank loan is payable on October The bank has the right to demand payment after any fiscal yearend
in which Nevada Harvester's ratio of current assets to current liabilities falls below a contractual minimum of to and remains
so for six months. That ratio was on December due primarily to an intentional temporary decline in inventory levels.
Normal inventory levels will be reestablished during the first quarter of
Required:
For each liability listed above, what amount will be reported as a current liability and as a noncurrent liability on the December
balance sheet?
Prepare theliability section of a classified balance sheet for Nevada Harvester at December Accounts payable and
accruals are $ million.
