Question: The accountant of Hantsport Ltd Hantsport is currently preparing the

The accountant of Hantsport Ltd. (Hantsport) is currently preparing the December 31, 2017 financial statements. She has asked you to help her classify the following items:
a. During December 2017, Hantsport withheld $4,000 from employees for their contributions to the company pension plan. The company is required to remit the contributed amount to the pension fund manager within 10 days of collection.
b. As of the end of December, Hantsport owed suppliers $68,000 for inventory purchases during November and December 2017.
c. The company has a $50,000 note payable coming due in March. Hantsport has arranged a three-year, $50,000 loan from the bank that will be used to repay the loan.
d. Hantsport has received $10,000 in advances for goods that will be delivered during 2018.
e. Hantsport has $100,000 outstanding with a private lender. $25,000 is scheduled to be repaid in 2018.
f. Hantsport declared a $120,000 cash dividend on December 21, 2017. The dividend is to be paid on January 15, 2018.
g. Hantsport has a $300,000 loan from the bank that has been outstanding for three years. The bank can demand repayment at any time.

Classify each of the items as a current or non-current liability (note that some may classified partially as current and partially as non-current). Provide your reasoning for each item.

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  • CreatedFebruary 26, 2015
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