The following selected transactios and events of Ashmore Ltd. Were completed during the accounting year just ended, 31 December 20X5. Interest rates reflect
market rates unless indicated.
a.On 1 June, the company borrowed $54,000 in cash from the bank on a demand basis. The interest rate was 5% to be paid on the anniversary date of the loan.
b.Merchandise was purchased on account; a $20,000, one year 6% interest-bearing note, dated 1 April 20X5, was given to the supplier. Interest is paid when the
amount is due on 1 April 20X6.
c.Merchandise was purchased on account; a two year, $18,000, 2% note dated 1 February 20X5 was given to the supplier. Interest is due annually on 1 February.
The going interest rate for this term and risk was 8%. Use the gross method to record the note payable.
d.A supplier delivered goods on account costing US$22,000. The exchange rate was US$1 = Cnd$0.96 at that time.
e.Ashmore has been sued by a customer for $450,000. The legal team confidently believes that there is an 85% chance that Ashmore will successfully defend itself.
f.New legislative requirements came into force at the beginning of this year regarding environmental remediation. Ashmore believes it will have to pay $90,000
in nine years time when the company vacates leased premises. The going interest rate for this term and risk was 8%.
g.Payroll records showed that the following amounts are unpaid: Gross wages $130,000; Income tax $33,000; EI $6,100; CPP $5,500; Union Dues $3,500.
h.The employer portion of EI and CPP are recorded.
i.Remittances were income tax, $31,350; EI $10,250; CPP $9,720; union dues $1,450.
j.Cash dividends declared but not yet paid were $23,500.
k.Accrue appropriate interest at 31 December, and adjust the foreign-denominated payable to the year end rate, US$1=Cnd$0.94.
Give the entry or entries for each of the above transactions and events, if needed. (if not needed, explain why)
Prepare a list (title and amount) of the liabilities of Ashmore at 31 December 20X5