Exercise 13-9 On December 31, 2017, Bramble Company has $7,024,000 of short-term

Question

Exercise 13-9

On December 31, 2017, Bramble Company has $7,024,000 of short-term debt in the form of notes payable to Gotham State Bank due in 2018. On January 28, 2018, Bramble enters into a refinancing agreement with Gotham that will permit it to borrow up to 68% of the gross amount of its accounts receivable. Receivables are expected to range between a low of $6,021,000 in May to a high of $8,014,000 in October during the year 2018. The interest cost of the maturing short-term debt is 15%, and the new agreement calls for a fluctuating interest at 1% above the prime rate on notes due in 2022. Bramble’s December 31, 2017, balance sheet is issued on February 15, 2018.

Prepare a partial balance sheet for Bramble at December 31, 2017, showing how its $7,024,000 of short-term debt should be presented. (Enter account name only and do not provide descriptive information.)

BRAMBLE COMPANY
Partial Balance Sheet

:

$

Bramble Company Partial Balance Sheet December 31, 2017 $ $

Explanation / Answer

Bramble corporation

Partial balance sheet

December 31, 2017

Long term notes payable = 602100*68%= 4094280

Current liabilities notes payable= 7024000-4094280= 2929720

Current liabilities: Notes payable 2929720 Long-term debt Notes payable expected to be refinanced in 2022 4094280

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