Joan's Golf Shop Ltd. had the following transactions involving current liabilities in its first year of operations: 1. 2 The company ordered golf equipment from suppliers for $555,000, on credit. It paid $505,500 to suppliers during the year. The shop has seven employees, who earn gross wages of $201,000 for the year. From this, the company deducted 20% for income taxes, $9,900 in CPP premiums, and $3,280 in El premiums before distributing the cheques to the staff. As an employer, Joan was also required to match the employees' CPP premiums and pay $4,592 in El premiums. Eleven-twelfths of the amounts due to the government (all except the last month) were paid before the end of the year. The company gives customers a one-year warranty against defects on golf clubs. Management estimated that warranty costs would total 2% of sales. Sales of golf clubs for the year were $1,150,000. During the year, the company spent $12,900 on refunds under the warranty. Some customers order very expensive, custom-made golf clubs. In these cases, the company requires them to pay a deposit of 50% of the selling price when the order is placed. During the year, deposits totalling $20,000 were received for custom orders. None of these orders have been delivered yet. 3. 4. Prepare journal entries to record the transactions. (Enter debit entries first followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry"for the account titles and enter Ofor the amounts. Round answers to 0 decimal places, eg. 14,674.) Debit Credit No. Account and explanation 1. (To record purchase of inventory on account.) (To record payment to supplier.) 2. (To record payment to the staff.) (To record employer's liabilities.) (To record payment to the government.) 3. (To record warranty expense.) (To record warranty payments.) 4. e Textbook and Media List of Accounts Question Part Score --/90 Prepare the current liabilities section of the statement of financial position as it would appear at the end of the year. (Round answers to 0 decimal places, eg. 14,674.) Current Liabilities: Lyrtricks Ltd., which has a December 31 year end, had the following transactions in December 2020 and January 2021: 2020 Dec, 1 Dec. 31 The company borrowed $135,000 from a bank on a five-year loan payable. The terms of the loan stipulate that Lyrtricks must repay 1/5 of the principal every November 30 plus the interest accrued to that date. The loan bears interest at 8% per annum. Recorded employee wages for December. The wages earned by employees amounted to $9,300, and the company withheld CPP of $536, El of $452, and income taxes of $2,000. Lyrtricks' employer contributions were $536 for CPP and $633 for El. Recorded the adjusting entry to record the interest incurred on the bank loan during December. Recorded the entry to reclassify the current portion of the bank loan. Paid the wages recorded on December 31. Made the remittance to the government related to the December 31 payroll. Dec. 31 Dec. 31 2021 Jan. 2 Jan. 15 Prepare all necessary journal entries related to the above transactions. (Enter debit entries first followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter for the amounts.) Date Account and explanation Debit Credit 2020 Dec. 1 Dec. 31 (To record wages payable.) (To record employer's liabilities.) Dec. 31 (To record interest.) (To record reclassification of current portion of bank loan.) 2021 Jan. 2 Jan. 15
