Exam 11: Current Liabilities and Contingencies

A company,using a perpetual inventory system,sells goods on credit for $10,000.The applicable PST rate is 5% and the GST rate is 10%.The cost of goods sold was $6,000.Sales taxes are remitted on a monthly basis.Prepare the necessary journal entries for this transaction.

On May I,2016,British Columbia Brew Supplies Inc.borrowed USS 180,000 from its bank.British Columbia's year-end is December 31,2016.Exchange rates were as follows: Requirement: Prepare the required journal entries to record receipt of the loan proceeds and for any adjustments required at year-end.

Which statement about deferred revenue is correct?

Indemnities and letters of credit are examples of?

Which of the following is correct about a "liability" under IFRS Framework?

What are the three broad categories of liabilities?

Which is not a current liability?

Which statement about contingencies is correct?

GOT Jetski Corp.has sold motorized watercraft for a number of years.GOT includes a three-year warranty on each watercraft they sell.Management estimates that the cost of providing the warranty coverage is 2% of sales in the first year and 3% of sales in each of years two and three.Other facts follow: • GGT reported a $270,000 provision for warranty payable on its December 31,2012 balance sheet. • GGT's sales for 2013 totalled $6,000,000 spread evenly through the year. • The cost to GGT of meeting their warranty claims in 2013 was $480,000; $300,000 for parts and $180,000 for labour. • GGT's sales for 2014 totalled $6,200,000 spread evenly through the year. • The cost to GGT of meeting their warranty claims in 2014 was $468,000; $280,800 for parts and $187,200 for labour.Based on recent claims history,GGT revises their 2014 warranty provision to 9% of sales. Requirements: a.Prepare summary journal entries to record warranty expense and warranty claims in 2013 and 2014. b.Determine the provision for warranty payable that GGT will report as a liability on December 31,2014.

Which statement is not correct about commitments?

Explain what contingent assets and liabilities are and how these items are accounted for financial reporting purposes.

For the following transaction,provide all of the required journal entries from inception to liquidation.Assume a December 31 year end and that the company does not prepare interim statements.Round all amounts to nearest dollar.

Which statement is correct?

Which statement about deferred revenue is correct?

Which statement is correct?

A company purchased inventory from Europe valued at $100,000 euros.The spot rate at the transaction date was C$1.00 = 0.85 Euro.The spot rate on year end date was C$1.00 = 0.80 Euro.When the company paid the supplier 3 months after year end the spot rate was C$1.00 = 0.90 Euro. Provide all necessary journal entries.Round all amounts to nearest dollar.

Which statement about contingent assets is correct?

Explain the difference between "probable," "possible," and "remote" under IFRS.

Explain some of the challenges that exist in determining the amount of a "liability" and factors that influence the value of the indebtedness.

Which statement is not correct?