Question 6 The following events occurred during the year ended 30 June 2020 for Electrical Limited.On 1 June 2020, Electrical Ltd. signed a three-month 12% per annum note payable to purchase a new equipment costing $48,000. Interest and principal are paid at maturity.On 29 June 2020, Electrical Ltd. received deposit in advance of $12,000 from a construction company for completing the electrical work for a new project during the next 6 months.Electricity charges of $40,000 from 24 April to 23 June are payable on 10 July.Electrical’s main product is backed by warranty. Sales of this product for the year totalled $445,000. The opening balance of provision for warranty claims was $10,600. During the year, Electrical’s warranty expense was $31,700 and claims paid to customers totalled $25,200.June sales totalled $212,000. Electrical Ltd. collected GST of 10% on this amount. This is due to be paid to the tax office by the seventh day of the following collection.On 30 June 2020, Electrical Ltd. took out a loan for $110,000 from AUZ Bank. Repayments of principal are scheduled evenly over a five-year period. Interest on the loan is paid in the year it is incurred. Required:For each item, indicate the account name and the amount to be included as a current liability on Electrical’s balance sheet prepared at 30 June 2020. (show your working for your calculation for each amount).

Current liability of the company that are expected to be paid out within 12 months from the…

Answered: Ltd. signed a three-month 12% per annum…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question 6 The following events occurred during the year ended 30 June 2020 for Electrical Limited.

On 1 June 2020, Electrical Ltd. signed a three-month 12% per annum note payable to purchase a new equipment costing $48,000. Interest and principal are paid at maturity.
On 29 June 2020, Electrical Ltd. received deposit in advance of $12,000 from a construction company for completing the electrical work for a new project during the next 6 months.
Electricity charges of $40,000 from 24 April to 23 June are payable on 10 July.
Electrical’s main product is backed by warranty. Sales of this product for the year totalled $445,000. The opening balance of provision for warranty claims was $10,600. During the year, Electrical’s warranty expense was $31,700 and claims paid to customers totalled $25,200.
June sales totalled $212,000. Electrical Ltd. collected GST of 10% on this amount. This is due to be paid to the tax office by the seventh day of the following collection.
On 30 June 2020, Electrical Ltd. took out a loan for $110,000 from AUZ Bank. Repayments of principal are scheduled evenly over a five-year period. Interest on the loan is paid in the year it is incurred.

Required:

For each item, indicate the account name and the amount to be included as a current liability on Electrical’s balance sheet prepared at 30 June 2020. (show your working for your calculation for each amount).

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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