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Information Fag ston Cash QUESTION: CURRENT & LONG-TERM LIABILITIES Time left 1:39:21 Flower Corporation operates a floral shop and is preparing its financial statements for the year ended, December 31, 2021. The bookkeeper is aware that you have recently completed a financial accounting course at NAIT and is seeking your assistance with identifying the different types of liabilities that should be shown on the classified Balance Sheet 7 Inco 1 Liat Div Based on your review and discussions with the bookkeeper, you have identified the following: 1. Flower Corporation owes trade creditors 518,000 at year-end for credit purchases of flower inventory 2/ In the month of December, Flower Corporation accepted $6,000 deposit from a couple that got engaged. The deposit is to cover the cost of flowers for their upcoming wedding in June 2022 3/ On January 1, 2020 Flower Corporation borrowed $100,000 from the bank which will be repaid in the next 4 years at an annual interest rate of 8% per year. Payments are due each December 31s. The bank provided Flower Corporation with the following loan amortization table: Flower Corporation Loan Amortization Table I PRT Loan Payment Beginning Loan Interest Ending Period Date Balance Payment = Principal + (8%) Balance Fixed Varles Year 1 Dec 31/2020 $ 100,000 $ 30,192 S 22,192 $ 8,000 $ 77,808 Year 2 Dec 31/2021 S 77,808 30,192 23,967 6,225 53,841 Year 3 Dec 31/2022 $ 53,841 30,192 25,885 4,307 27,956 Year 4 Dec 31/2023 s 27,956 30,192 27,956 2,236 0 TOTAL $ 120,768 $ 100,000 $20.768 Sh th NS M 2 F 4/ Flower Corporation runs payroll for staff every two weeks. As of year-end, a total of $7,000 were owing to staff. 5/ At December 31, Flower Corporation exceeded its cash balance by $4,000 and the bank automatically activated a line of credit to cover the shortage, 22 In the month of December, Flower Corporation accepted $6,000 deposit from a couple that got engaged. The deposit is to cover the cost of flowers for their upcoming wedding in June 2022 3/ On January 1, 2020. Flower Corporation borrowed $100,000 from the bank which will be reme next 4 years at an annual interest rate of 8% per year. Payments are due each December 31Time left 1:39:14 provided Flower Corporation with the following loan amortization table: Flower Corporation Loan Amortization Table I PRT Loan Payment Beginning Loan Interest Ending Period Date Balance Payment - Principal + (8%) Balance Fixed Varies Year 1 Dec 31/2020 $ 100,000 S 30,192 $ 22,192 $ 8,000 $ 77,808 Year 2 Dec 31/2021 $ 77,808 30,192 23,967 6,225 53,841 Year 3 Dec 31/2022 $ 53,841 30,192 25,885 4,307 27,956 Year 4 Dec 31/2023 $ 27,956 30,192 27,956 2,236 0 TOTAL $ 120,768 $ 100,000 $20.768 4/ Flower Corporation runs payroll for staff every two weeks. As of year-end, a total of $7,000 were owing to staff. 5/ At December 31, Flower Corporation exceeded its cash balance by $4,000 and the bank automatically activated a line of credit to cover the shortage. 6/ Flower Corporation has $100,000 of bonds payable which will mature on March 1/ 2025. 71 The Board of Directors declared a dividend of $10,000 on December 31, 2021 which will be paid on February 1, 2022 to all shareholders on record as at January 15, 2022. 8/ Flower Corporation filed its corporate income tax return and will pay $9,500 by February 1/2022. 10 Using the information provided, prepare the liabilities section of a Classified Balance Sheet. For each item listed, consider: Would it be a current liability, a non-current liability, or have elements of both? . WA -10 Using the information provided, prepare the liabilities section of a Classified Balance Sheet. For each item listed, consider: . Would it be a current liability, a non-current liability, or have elements of both? What would the liability be called? What dollar value would be assigned to each liability? it of 7 A BIO Flower Corporation Balance Sheet At December 31, 2021 Current Liabilities $ on 11 Flower Corporation has a long-term loan with the bank. What type of loan is this? out of Select one: a Lump Sum Loan Ob Instalment Loan (with equal principal payments) OC A loan with bondholders Od. Instalment Loan (with equal blended payments) 12 Identify two ways the loan could have been structured differently to minimize interest expense. A-BI 01

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