Reference no: EM133079480

Question - A note payable was issued on June 1/21 to purchase inventory. The note was issued for $36,000, bears interest at 5% per year and is repayable within one year. No payments were made on the loan as of their June 30, 2021 year end.

Since the last GST reporting period, GST collected on sales totalled $2,800 and input tax credits paid totalled $650. There were no other GST amounts payable or receivable.

Kate collects cash on a customers accounts of $1,950 in the month of June. After these payments the amounts receivable from customers total $2,900.

Salary expense for the month of June totalled $7,600 of gross wages. Included in the gross wages are withholdings of employee income taxes of $750, CPP of $250, EI of $75 and other benefits payable of $75. The net payable to employees is $6,450. None of these amounts were paid as of year end.

As of June 30, 2021, balances owing to suppliers total $3,200.

Kate obtained a bank loan on June 15 to purchase new kitchen equipment. The loan was for $48,000 and bears interest at 10% per year. There will be 60 monthly principal payments of $800 made on the 15th day of each month, with the first payment starting on July 15th.

Kate purchases a new commercial oven and fridge for $9,300 and pays cash for these assets.

Kate collected $2,800 for a wedding cake to be made and delivered to a clients wedding on July 31, 2021.

After all payments were made for the month, Kate had to use her bank overdraft (or line of credit) to cover these costs. The overdraft balance as of June 31, 2021 was $4,190

Kate recently started selling small kitchen appliances in addition to baking goods and offers a warranty on these appliances. After research and discussions with her supplier, it is determined an estimate of units would be that 8% of all appliance sales will require warranty work in units. Each unit requiring warranty work would have an average cost of $30 per unit. Appliance sales for the year totalled 1,500 units.

Accounting services provided, but not yet billed by Kate's Cakes accountant are estimated at $1,800

After all transactions for the year, taxable income was determined to be $52,000. As they are based out of Alberta, their corporate tax rate is 12%.

Prepare the liabilities section of Kate's Cakes Ltd as of June 30, 2021. Assume all opening balances were zero. If the item listed above has no effect on the liability section, be sure to note this. Finally, ensure liabilities are split between current and long-term.