Jenkins Corporation has $2,500,000 of short-term debt it expects to retire with proceeds from the sale of 75,000 ordinary shares.If the shares are sold for $20 per share subsequent to the statement of financial position date, but before the statement of financial position is issued, what amount of short-term debt could be excluded from current liabilities?

Question

Quizplus · Accepted Answer

The proceeds from the sale of 75,000 shares at $20 per share would be $1,500,000. This amount can be used to retire the short-term debt, allowing Jenkins Corporation to exclude $1,500,000 from current liabilities.

Jenkins Corporation Has $2,500,000 of Short-Term Debt It Expects to Retire