The following events occurred during the year ended 30 June 2020 for Electrical Limited.On 1 June 2020, Electrical Ltd. signed a three-month 9% per annum bills payable to purchase a new equipment costing $576,000. Interest and principal are paid at maturity.On 29 June 2020, Electrical Ltd. received deposit in advance of $10,000 from a construction company for completing the electrical work for a new project during the next 6 months.Electricity charges of $50,000 from 24 April to 23 June are payable on 10 July.Electrical’s main product is backed by warranty. Sales of this product for the year totalled $445,000. The opening balance of provision for warranty claims was $15,900. During the year, Electrical’s warranty expense was $47,550 and claims paid to customers totalled $37,800.June sales totalled $252,000. Electrical Ltd. collected GST of 10% on this amount. This is due to be paid to the tax office by the seventh day of the following collection.On 30 June 2020, Electrical Ltd. took out a loan for $150,000 from AUZ Bank. Repayments of principal are scheduled evenly over a five-year period. Interest on the loan is paid in the year it is incurred. Required:For each item, indicate the account name and the amount to be included as a current liability on Electrical’s balance sheet prepared at 30 June 2020. (show your working for your calculation for each amount).

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Answered: The following events occurred during…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 11E

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The following events occurred during the year ended 30 June 2020 for Electrical Limited.

On 1 June 2020, Electrical Ltd. signed a three-month 9% per annum bills payable to purchase a new equipment costing $576,000. Interest and principal are paid at maturity.
On 29 June 2020, Electrical Ltd. received deposit in advance of $10,000 from a construction company for completing the electrical work for a new project during the next 6 months.
Electricity charges of $50,000 from 24 April to 23 June are payable on 10 July.
Electrical’s main product is backed by warranty. Sales of this product for the year totalled $445,000. The opening balance of provision for warranty claims was $15,900. During the year, Electrical’s warranty expense was $47,550 and claims paid to customers totalled $37,800.
June sales totalled $252,000. Electrical Ltd. collected GST of 10% on this amount. This is due to be paid to the tax office by the seventh day of the following collection.
On 30 June 2020, Electrical Ltd. took out a loan for $150,000 from AUZ Bank. Repayments of principal are scheduled evenly over a five-year period. Interest on the loan is paid in the year it is incurred.

Required:

For each item, indicate the account name and the amount to be included as a current liability on Electrical’s balance sheet prepared at 30 June 2020. (show your working for your calculation for each amount).

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