Included in Vernon Corp

question 25

Multiple Choice

Included in Vernon Corp.'s liability account balances at December 31, 2010, were the following: Vernon's December 31, 2010 financial statements were issued on March 31, 2011.On January 15, 2011, the entire $600,000 balance of the 8% note was refinanced by issuance of a long-term obligation payable in a lump sum.In addition, on March 10, 2011, Vernon consummated a noncancelable agreement with the lender to refinance the 7%, $250,000 note on a long-term basis, on readily determinable terms that have not yet been implemented.On the December 31, 2010 statement of financial position, the amount of the notes payable that Vernon should classify as short-term obligations is

• A)$175,000.
• B)$125,000.
• C)$50,000.
• D)$0.

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Definitions:

MRP

Material Requirements Planning; a system for managing manufacturing processes through inventory control, scheduling, and procurement.

JIT

Just In Time, a production strategy that aims to reduce in-process inventory and associated carrying costs by producing and delivering products just in time to be sold or used.

Gross Requirements Plan

A schedule that specifies the amount and timing of future material and component requirements necessary to fulfill the production plan.

Net Requirements Plan

An output of the manufacturing planning process that identifies the quantity and timing of future material or product demands based on current inventory levels and scheduled supply.