Grogan Corporation has $1,800,000 of short-term debt it expects to retire with proceeds from the sale of 60,000 shares of common stock.If the stock is sold for $20 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?
A)$1,200,000
B)$1,800,000
C)$600,000
D)$0

Question

Quizplus · Accepted Answer

The proceeds from the sale of 60,000 shares at $20 per share would be $1,200,000. This amount can be used to retire the short-term debt, allowing $1,200,000 of the debt to be excluded from current liabilities.

Grogan Corporation Has $1,800,000 of Short-Term Debt It Expects to Retire