Question

Coronado Industries has $2650000 of short-term debt it expects to retire with proceeds from the sale of 52000 shares of common stock. There is no contractual agreement to retire the debt with the stock sale proceeds. If the stock is sold for $35 per share subsequent to the balance sheet date, but before the balance sheet is issued, what amount of short-term debt could be excluded from current liabilities

Answer 1

$1,820,000

Step-by-step explanation:

The computation of the short debt excluded from the current liabilities is shown below:

= Number of shares of common stock × per share value

= 52,000 shares × $35 per share

= $1,820,000

Hence, the calculated amount should be excluded