Question

At the financial statement date of December 31, 2017, the liabilities outstanding of Pollard Corporation included the following:

1.   Cash dividends on common stock, $50,000, payable on January 15, 2018.

2.   Note payable to Wabaso State Bank, $470,000, due January 20, 2018.

3.   Serial bonds, $1,800,000, of which $450,000 mature during 2018.

4.   Note payable to Orlando National Bank, $300,000, due January 27, 2018.

The following transactions occurred early in 2018:

January 15:   The cash dividends on common stock were paid.

January 20:   The note payable to Wabaso State Bank was paid.

January 25:   The corporation entered into a financing agreement with Wabaso State Bank, enabling it to borrow up to $500,000 at any time through the end of 2020. Amounts borrowed under the agreement would bear interest at 1% above the bank's prime rate and would mature 3 years from the date of the loan. The corporation immediately borrowed $400,000 to replace the cash used in paying its January 20 note to the bank.

January 26:   40,000 shares of common stock were issued for $350,000. $300,000 of the proceeds was used to liquidate the note payable to Orlando National Bank.

February 1:   The financial statements for 2017 were issued.

Instructions

Prepare a partial balance sheet for Pollard Corporation, showing the manner in which the above liabilities should be presented at December 31, 2017. The liabilities should be properly classified between current and long-term, and appropriate note disclosure should be included.

Answer 1

Balance sheet at december 2017
Particulars				amount	amount
Laibilities -current
Dividend payable				50000
Notes payable				470000
current maturity portio of serial				450000
total Current Laibility (A)					970000
Long term laibility
Notes payable- orlando national bank				300000
serial bond no mature (1800000-450000)				1350000
Total long term laibility (B)					1650000
Total laibility (A)+(B)
Disclosure
company issue 40000 share on 26 jan & receive $350000 & 300000
use to liquidate notes payable which mature on 27 jan 2018
these notes payable has classified as long term debt on dec 31 2017