A Company Has $5,000,000 in Long-Term Debt Outstanding

question 11

Multiple Choice

A company has $5,000,000 in long-term debt outstanding.It expects to repay the loan evenly over the next four years.Which of the following represents how it will be shown on the year-end statement of financial position?

• A)Accounts Payable: $1,250,000,Long-Term Debt: $3,750,000
• B)Current Portion of Long-Term Debt: $1,250,000,Long-Term Debt: $3,750,000
• C)Current Portion of Long-Term Debt: $2,500,000,Long-Term Debt: $2,500,000
• D)Long-Term Debt: $5,000,000

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Definitions:

Indirect Method

A method of calculating cash flows from operating activities in the cash flow statement by adjusting net income for changes in balance sheet items.