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In: Accounting

Indicate whether each of the items above should be classified under IFRS on December 31, 2017...

Indicate whether each of the items above should be classified under IFRS on December 31, 2017 as a current or long-term liability or under some other classification. Consider each item independently from all others; that is, do not assume that all of them relate to one particular business. If the classification of some of the items is doubtful, explain why in each case.

1) A bank loans payable of a winery, due March 10, 2021 (wine requires aging for five years before it can be sold)

2) $12 million of serial bonds payable, of which $2 million is due each July 31

3) Amounts withheld from employees' wages for income tax purposes

4) Notes payable that are due February 20, 2020

5) Interest payable on a note payable (the note is due January 15, 2020 and the interest is due June 30, 2018)

6) Credit balance in a customer's account arising from returns and allowances after collection in full of the account

7) Bonds payable of $2 million maturing June 30, 2021

8) An overdraft of $1,000 in a bank account (no other balances are carried at this bank)

9) An overdraft of $1,000 in a bank account (other accounts are carried at this bank and have positive account balances)

10) Deposits made by customers who have ordered goods

Expert Solution

Solution:-

1) A bank loans payable of a winery, due March 10, 2021 (wine requires aging for five years before it can be sold):-

2) $12 million of serial bonds payable, of which $2 million is due each July 31:-

Particulars	Amount ($ in million)
Current liability	2
Long-term liability	10

3) Amounts withheld from employees' wages for income tax purposes:-

4) Notes payable that are due February 20, 2020:-

5) Interest payable on a note payable (the note is due January 15, 2020 and the interest is due June 30, 2018):-

6) Credit balance in a customer's account arising from returns and allowances after collection in full of the account:-

7) Bonds payable of $2 million maturing June 30, 2021:-

Current liability unless

A fund for liquidation has been accumulated which is not classified as acurrent asset or
Arrangements have been made for refinancing.

8) An overdraft of $1,000 in a bank account (no other balances are carried at this bank):-

9) An overdraft of $1,000 in a bank account (other accounts are carried at this bank and have positive account balances):-

10) Deposits made by customers who have ordered goods:-

ekkarill92 answered 1 year ago

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