LADLE Corporation has the following selected accounts at year-end, December 31, 2019:

Accounts payable $ 72,500

                Accumulated Depreciation—Equipment                                                   14,000

                Employee Benefits Expense                                                                           6,000

                GST Collected on Sales                                                                                  24,000

                GST Paid on Purchases                                                                                  16,000

                6% Bank Loan Payable (see additional notes)                                           250,000

                Interest Payable (related to the 6% loan)                                                    ?

                4% Note payable                                                                                            20,000

Additional information:

• The 6% bank loan payable is being paid off over 5 years with annual fixed (equal) principle payments plus interest.   The next payment is due on January 1, 2020.
• The 4% note payable is maturing on February 1, 2020 but on January 15, 2020, the entire $20,000 balance was refinanced by the issuance of a long term note to be repaid in 2021. Interest is due and has been paid at the end of each month.
• During 2019, LADLE sold 2,000 one-year product warranty contracts at $18 each.   The corporation spent $3,780 servicing these warranties in 2019 and estimates that an additional $11,340 will be spent in 2020 before the warranties expire. LADLE recognizes warranty revenue based on the proportion of costs incurred out of total estimated costs.
• A competitor company filed a patent infringement suit against LADLE in November 2019, claiming damages of $500,000.   The company’s legal counsel has indicated that an unfavourable verdict is probable/likely. The company estimates the value of the court’s award to the competitor as follows:   

     Chance                           Amount

          10%                          $           0

          20%                           100,000

          50%                           200,000

          20%                           500,000

The company has not reflected or disclosed this situation in the accounts.

• On December 31, LADLE issued a 3-year, zero-interest-bearing note with a $800,000 face value to BUTTER Corp. in exchange for $800,000 cash. LADLE also gave BUTTER the right to use a small warehouse at the back of the company’s property for the next 12 months. Interest rates for notes of this type were 7% at the time of issue.

Required:

a) On a separate piece of paper, prepare the current liability section of LADLE Corporation’s statement of financial position if the company follows IFRS.   Show your work.  

b) Ooooh, tricky question... How would your answer change if the company followed ASPE?

Answer rating: 100% (QA)

Answer a Current Liabilities Section of LADLE Corporations Statement of Financial Position IFRS Acco... View the full answer