Question

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

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

- Note payable to Silicon Valley Bank, $470,000, due January 20, 2018.

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

- 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 Silicon Valley Bank was paid.

January 25: The corporation entered into a financing agreement with Silicon Valley 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 Arcadia 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

Arcadia corporation

Partial Balance Sheet

As on. 31st December,2017

Particulars	Note No.	Amount
Current liabilities
Dividend payable		50000
Notes payable	1	770000
Short term borrowing(serial bonds due)	2	450000
Non current liabilities
Long term borrowing	3	1350000
Total		2620000

Notes

1 Notes payable to silicon valley bank 470000

Notes payable to Orlando national bank 300000

Total. 770000

2. Total serial bonds 1800000

Due after 2018 1350000

current liability 450000

3.Serial bonds 1800000

Due in the year 2018. 450000

Non current or long term borrowing 1350000

Note : Transaction taking place after 31 st December 2017 should not be incorporated in balance sheet as it's is prepared as on date.