On February 28, 2015, Molega Ltd.'s general ledger contained the following liability accounts: Accounts payable ............................. $42,500

Question:

On February 28, 2015, Molega Ltd.'s general ledger contained the following liability accounts:

Accounts payable ............................. $42,500

CPP payable ...................................2,680

EI payable .....................................1,123

Sales tax payable .............................5,800

Income tax payable ..........................5,515

Unearned revenue ........................... 15,000

The following selected transactions occurred during the month:

Mar. 2 Issued a three-month, 6% note payable in exchange for an account payable in the amount of $10,000. Interest is due at maturity.

5 Sold merchandise for cash totalling $40,000, plus 13% HST. The cost of goods sold was $24,000.

Molega uses a perpetual inventory system.

9 Received the property tax bill of $18,000 for the calendar year. It is payable on May 1.

12 Provided services for customers who had made advance payments of $11,300 including HST, which is not payable until the related sale occurs.

13 Paid $5,800 HST to the Receiver General for sales tax collected in February.

16 Paid $9,318 to the Receiver General for amounts owing from the February payroll for employee payroll deductions of $7,323 (CPP $1,340, EI $468, and income tax $5,515) and for employee benefits of $1,995 (CPP $1,340 and EI $655).

27 Paid $30,000 to trade creditors on account.

31 Paid employees for the month. Gross salaries totalled $16,000 and payroll deductions included CPP of $792, EI of $285, and income tax of $5,870. Employee benefits included CPP of $792 and EI of $399.

Instructions

(a) Record the above transactions.

(b) Record any required adjusting entries at March 31.

(c) Prepare the current liabilities section of the statement of financial position at March 31.

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Related Book For  book-img-for-question

Financial Accounting Tools for Business Decision Making

ISBN: 978-1118644942

6th Canadian edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine

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