Cooper's Inventory Has Been Financed 100% with a Long-Term Note

question 38

Multiple Choice

Cooper's inventory has been financed 100% with a long-term note.The note is coming due in 2011.Cooper has received a commitment from a new lender that permits five-year refinancing of debt up to an amount equal to 50% of inventory, which is expected to range between $9, 000 and $15, 000 in 2011.At December 31, 2010, how much of the company's currently maturing note payable can be classified as long-term debt?

• A)$4, 500
• B)$6, 000
• C)$7, 500
• D)$9, 000

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