The following events occurred during the year ended 30 June 2020 for Electrical Limited.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 $12,720. During the year, Electrical’s warranty expense was $38,040 and claims paid to customers totalled $30,240.June sales totalled $312,000. 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 $130,000 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).

The account name and the calculation of amount to be included as a current liability on Electrical's…

Answered: Required: For each item, indicate the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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

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 $12,720. During the year, Electrical’s warranty expense was $38,040 and claims paid to customers totalled $30,240.
June sales totalled $312,000. 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 $130,000 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).

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