Reference no: EM133012310

While examining the 2019 financial statements of Warder Corporation, you found evidence that the following were not included in its current liabilities on the December 31, 2019, balance sheet:

• A note payable due and paid by Warder on February 19, 2019. Warder obtained long-term financing equal to this amount paid on February 26, 2019.
• Note payable due 2 months after the balance sheet date, with refinancing agreement entered into 4 weeks after the balance sheet date.
• Notes payable of Warder's completely owned subsidiary due its shareholders and payable upon demand.
• Deposits from customers on equipment ordered by them from Warder.

Required:

Problem 1: Discuss the assumptions needed for Warder to correctly exclude the previously mentioned items from the December 31, 2019, current liabilities. The balance sheet was issued on March 3, 2020.