The following are selected transactions of Pendlebury Department Store Ltd. (PDSLO for the current year ending December 31. PDSL is a private company operating in the province of Manitoba. On February 2, PDSL purchased goods having cash discounts terms of 2/10, n/30 from Hashmani Limited for $46,000. Purchases and accounts payable are recorded using the periodic system in net amounts after cash discounts. The invoice was paid on February 26. On April 1, PDSL purchased a truck for $50,000 from Schuler Motors Limited, paying $5,000 cash and signing a one year, 8% note for the balance of the purchase price. On May 1, PDSL borrowed $83,000 from First Provincial Bank by signing a $92,000 non-interest bearing note due one year from May 1 On June 30 and December 31, PDSL remitted cheques for $19,000 each as instalments on its current year tax liability. On August 14, PDSLs board of directors declared a $13,000 cash dividend that as payable on September 10 to shareholders of record on August 31. On December 5, PDSL received $750 from Jefferson Ltd. as a deposit on a trailer that Jefferson is using for an office move. The deposit is to be returned to Jefferson after it returns that trailer in good condition on January 15. On December 10, PDSL purchased new furniture and fixtures for $8,000 on account. Provincial sales tax of 8% and GST of 5% were charged by the supplier on the purchase price. During December, cash sales of $79,000 were recorded, plus 8% provincial sales tax and 5% GST that must be remitted by the 15th day of the following month. Both taxes are levied on the sale amount to the customer. PDSLs lease for its store premises calls for a $2,500 monthly rental payment plus 3% of net sales. The payment is due one week after month end. PDSL was advised during the month of December that it is legally required to restore the area (considered a land improvement) surrounding one of its new store parking lots, when the store closed in 12 years. PDSL estimates that the fair value of this obligation at December 31 is $46,000 The corporate tax return indicated taxable income of $205,000. PDSLs income tax rate is 20%.

Instructions:

A) Prepare all the journal entries that are necessary to record the above transactions when they occurred and any adjusting journal entries (except for depreciation expense) related to the transactions that would be required to present financial statements on December 31 in accordance with GAAP. Date each entry.

B) Identify the current liabilities that will be reported on PDSL's December 31 statement of financial position, and indicate the amount of each one.

C) Prepare the journal entries for transactions 7 and 8 above if the 8% sales tax was applied on the purchase or sale amount plus the GST.

D) Why is the liabilities section of the statement of financial position of primary significance to bankers?

E)How are current liabilities related to current assets?

F) Comment on any differences that would apply in your accounting treatment for parts (A) through (C) if Pendlebury had followed IFRS.