The following transactions are for Iqaluit Ltd., which has an April 30 year end.
1. Received property taxes assessment of $12,000 on March 1 for the calendar year. They are payable by May 1.
2. Purchased equipment for $35,000 on April 1 by making a $5,000 down payment and borrowing the remainder from the bank for a six-month period; 6% interest is payable on the first of each month.
3. Purchased inventory for $7,000 on April 27 on account, terms 2/10, n/30.
4. Sold inventory on April 28 for $15,000, plus 5% GST. (There is no PST in Nunavut, where Iqaluit Ltd. is based.) The cost of the goods sold was $10,500. The company uses a perpetual inventory system.
5. Received $25,000 from customers on April 29 for services to be performed in May.
6. Weekly salaries of $40,000 are paid every Friday for a five-day workweek (Monday to Friday). This year, April 30 is a Monday. Payroll deductions for the one day of this period that falls before the end of the year include CPP of $393, EI of $150, and employee income tax of $3,200. Employee benefits to be paid by the employer include CPP of $393 and EI of $210. Payroll deductions will be paid on May 15.
7. Iqaluit, which reports under IFRS, was named in a lawsuit alleging negligence for an oil spill that leaked into the neighbouring company's water system. Iqaluit's legal counsel estimates that it is probable that the company will lose the suit but the amount of the loss cannot be determined yet.
7. Iqaluit paid income tax instalments of $80,000 throughout the year. After the preparation of its year-end corporate income tax return, it was determined that the total corporate income tax payable for the year was $95,000.
8. Iqaluit reported non-current liabilities of $150,000 at April 30, of which $15,000 was due within the next year.
9. Iqaluit has a $50,000 operating line of credit available, on which no funds have yet been drawn.
Instructions
(a) Identify which of the above transactions give rise to amounts that should be reported in the current liabilities section or the non-current liabilities section of Iqaluit's statement of financial position as at April 30. Identify the account title(s) and amount(s) for each reported liability.
(b) Indicate any information that should be disclosed in the notes to Iqaluit's financial statements.