Reference no: EM13172947
Refinancing of Short-Term Debt Andretti Inc. issued $10,000,000 of short-term commercial paper during the year 2010 to finance construction of a plant. At December 31, 2010, the corporation's year-end, Andretti intends to refinance the commercial paper by issuing long-term debt. However, because the corporation temporarily has excess cash, in January 2011 it liquidates $3,000,000 of the commercial paper as the paper matures. In February 2011, Andretti completes an $18,000,000 long-term debt offering. Later during the month of February, it issues its December 31, 2010, financial statements. The proceeds of the long-term debt offering are to be used to replenish $3,000,000 in working capital, to pay $7,000,000 of commercial paper as it matures in March 2011, and to pay $8,000,000 of construction costs expected to be incurred later that year to complete the plant.
(a) How should the $10,000,000 of commercial paper be classified on the December 31, 2010, January 31, 2011, and February 28, 2011, balance sheets? Give support for your answer and also consider the cash element.
(b) What would your answer be if, instead of a refinancing at the date of issuance of the financial statements, a financing agreement existed at that date?
|
How many grams of potassium permanagate are needed
: how many grams of potassium permanagate are needed to discolor 1 gram of 2-pentene in basic solution.
|
|
Define how many moles of gas are in a container
: How many moles of gas are in a container that is 2.00 L, at 30.0 atm and a temperature of 25.0 C?
|
|
Prepare the journal entries that should be recorded
: Prepare the journal entries that should be recorded in 2011 relative to the premium plan and premium Entries to stimulate the sales of its Alladin breakfast cereal, Loptien Company places 1 coupon in each box. Five coupons are redeemable for a prem..
|
|
State cells use the hydrolysis of adenosine triphosphate
: Cells use the hydrolysis of adenosine triphosphate, abbreviated as ATP, as a source of energy. Symbolically, this reaction can be represented as ATP(aq) + H2O(l) ? ADP(aq) + H2PO4-(aq)
|
|
How should the commercial paper classified
: How should the $10,000,000 of commercial paper be classified on the December 31, 2010, January 31, 2011, and February 28, 2011, balance sheets and What would your answer be if, instead of a refinancing at the date of issuance of the financial stat..
|
|
Explain natural monopoly and monopolistic competition
: Which of the following industries is most likely closest to achieving perfect price discrimination? Which of the following is an example of a natural monopoly?
|
|
State what is the mass of a piece of concrete that starts
: What is the mass of a piece of concrete that starts at 90.0 C, us immersed in a calorimeter with 350.0 g of water at 26.0 C
|
|
Define what amount of heat is produced
: what amount of heat is produced? The specific heat of aluminum is 0.90J/g C?
|
|
Compute the molar solubility of bbarium sulfate
: Calculate the molar solubility of bbarium sulfate, BaSO4, in 0.010 M Sodium Sulfate, Na2SO4, solution at 25C. Compare this to the solubility of BaSO4 in pure H2O. What is the common ion?
|