HW 13 - Ch 13 - Homework Q1) On December 31, 2007, Gibson...

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Ch 13 - Homework Q1) On December 31, 2007, Gibson Company has $18,200,000 of short-term debt in the form of notes payable to Blue Lagoon State Bank due in 2008. On January 28, 2008, Gibson enters into a refinancing agreement with Blue Lagoon that will permit it to borrow up to 60% of the gross amount of its accounts receivable. Receivables are expected to range between a low of $15,600,000 in May to a high of $20,800,000 in October during the year 2008. The interest cost of the maturing short-term debt is 15%, and the new agreement calls for a fluctuating interest at 1% above the prime rate on notes due in 2012. Gibson’s December 31, 2007, balance sheet is issued on February 15, 2008. Instructions Prepare a partial balance sheet for Gibson at December 31, 2007, showing how its $18,200,000 of short- term debt should be presented, including note disclosure. Q2) Below are three independent situations. 1. In August, 2007 a worker was injured in the factory in an accident partially the result of his own negligence. The worker has sued Rooney Co. for $800,000. Counsel believes it is reasonably possible
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This note was uploaded on 04/09/2010 for the course ACC 5110 taught by Professor Lee during the Winter '10 term at Wayne State University.

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HW 13 - Ch 13 - Homework Q1) On December 31, 2007, Gibson...

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