The Following Information Is Given for Airflight Airlines

Essay

The following information is given for Airflight Airlines:
-As of December 31, 2015, Airflight had $10,000 of notes coming due on January 30, 2016. Also as of December 31, 2015, Airflight was negotiating to issue long-term debt so that it could use the proceeds to liquidate these short-term notes as they mature. On January 4, 2016, the company used $3,000 of excess cash to pay off part of the note. On January 29, 2016, a refinancing of the entire $10,000 was completed. The $3,000 was replaced and the rest of the notes were extended for another two years.
-Airflight has negotiated a long-term refinancing contract which permits Airflight to borrow an up to 60% of accounts receivable balances to refinance debt. Accounts receivable are expected to range between $12,000 and $16,000 next year.
-Airflight also has negotiated a new long-term refinancing contract which permits Airflight to borrow an amount up to 35% of inventory to refinance debt. Inventory is expected to range between $75,000 and $85,000 next year.
Required:
a. On the December 31, 2015 balance sheet, how much of the $10,000 note should be shown as short-term?
b. Airflight has a currently maturing note payable of $20,000 related to the accounts receivable refinancing contract. How much of the $20,000 note payable can be classified as long-term debt at the end of 2015?
c. Compute the amount of the company's currently maturing note payable of $50,000 related to refinancing inventory that must be classified as short-term debt on December 31, 2015.