Shoes supreme Ltd 's general ledger at their July 31, this year end included the following account balances before adjusting journal entries Note Payable, Short Term $ 80,000 Accounts Payable 400,000 Current Portion of Long Term Debt Payable Interest Payable Salaries Payable Employee Withholdings Payable Employee Payroll Costs Payable Employee Insurance Benefits Payable Estimated Vacation Pay Liability GST Payable 5,000 Property Tax Payable 10,000 Unearned Service Revenue 48,000 Long Term Debt Payable 400,000 The following information is related to selected transactions of Coast Supplies Ltd This information will be used by the company to prepare adjusting journal entries at July 31, this year On August 31, last year, Coast Supplies Ltd signed a 2 , 1 year, $80,000 note payable The $400,000 long term debt was payable in annual instalments of $50,000, with the next instalment due March 31, next year On that date, Coast Supplies Ltd would also pay 1year's interest at 4 Interest was last paid on March 31, this year Gross salaries for the last payroll of the fiscal year were $60,000 Of this amount, employee withholdings were $10,000, and salaries payable was $50,000 and would be paid in mid August Employer payroll costs were $8,000, and Coast Supplies Ltd 's liability for employee life insurance was $1,000 Coast Supplies Ltd estimated that vacation pay is 5 of gross salaries, which was $900,000 Note that the $900,000 included the last payroll of the fiscal year On April 01, this year, Coast Supplies Ltd collected 1 year's service contract revenue, paid in advance, worth $48,000 It will earn the revenue evenly throughout the year At July 31, this year, Coast Supplies Ltd was the defendant in a $600,000 lawsuit, which Coast Supplies Ltd expected to win However, the outcome was uncertain Required please answer each question Open T accounts for the listed accounts, inserting their unadjusted July 31, this year balances Post the July 31, this year adjusting journal entries to the accounts opened Round all amounts to the nearest dollar Use months (as opposed to actual days) in your calculations for the adjusting journal entries Prepare the liability section of Coast Supplies Ltd 's balance sheet at July 31, this year Show total current liabilities, long term liabilities, and total liabilities Was there a contingent liability If yes, write a note to explain it, indicating where the note should appear

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Apr 18, 2024

Shoes supreme Ltd.'s general ledger at their July 31, this year-end included the following account balances before adjusting journal entries: Note Payable, Short-Term $ 80,000

Shoes supreme Ltd.'s general ledger at their July 31, this year-end included the following account balances before adjusting journal entries:

Note Payable, Short-Term	$ 80,000
Accounts Payable	400,000
Current Portion of Long-Term Debt Payable
Interest Payable
Salaries Payable
Employee Withholdings Payable
Employee Payroll Costs Payable
Employee Insurance Benefits Payable
Estimated Vacation Pay Liability
GST Payable	5,000
Property Tax Payable	10,000
Unearned Service Revenue	48,000
Long-Term Debt Payable	400,000

The following information is related to selected transactions of Coast Supplies Ltd. This information will be used by the company to prepare adjusting journal entries at July 31, this year.

On August 31, last year, Coast Supplies Ltd. signed a 2%, 1-year, $80,000 note payable.
The $400,000 long-term debt was payable in annual instalments of $50,000, with the next instalment due March 31, next year. On that date, Coast Supplies Ltd. would also pay 1year's interest at 4%. Interest was last paid on March 31, this year.
Gross salaries for the last payroll of the fiscal year were $60,000. Of this amount, employee withholdings were $10,000, and salaries payable was $50,000 and would be paid in mid August.
Employer payroll costs were $8,000, and Coast Supplies Ltd.'s liability for employee life insurance was $1,000.
Coast Supplies Ltd. estimated that vacation pay is 5% of gross salaries, which was $900,000. Note that the $900,000 included the last payroll of the fiscal year.
On April 01, this year, Coast Supplies Ltd. collected 1 year's service contract revenue, paid in advance, worth $48,000. It will earn the revenue evenly throughout the year.
At July 31, this year, Coast Supplies Ltd. was the defendant in a $600,000 lawsuit, which Coast Supplies Ltd. expected to win. However, the outcome was uncertain.

Required: please answer each question

Open T-accounts for the listed accounts, inserting their unadjusted July 31, this year balances.
Post the July 31, this year adjusting journal entries to the accounts opened. Round all amounts to the nearest dollar. Use months (as opposed to actual days) in your calculations for the adjusting journal entries.
Prepare the liability section of Coast Supplies Ltd.'s balance sheet at July 31, this year. Show total current liabilities, long-term liabilities, and total liabilities.
Was there a contingent liability? If yes, write a note to explain it, indicating where the note should appear.