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30 Jun

manufactured a broad range of quality


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Rushtop Ltd. has manufactured a broad range of quality products since 1988. The following information is available for the company’s fiscal year ended March 31, 2014. Rushtop follows ASPE. 1. The company has $5 million of bonds outstanding at March 31, 2014, that were issued at par in 2003. The bonds carry an interest rate of 4%, payable semi-annually each June 1 and December 1. 2. Rushtop has several notes payable outstanding with its primary banking instituation at March 31, 2014. In each case, the annual interest is due on the anniversary date of the note each year (same as the due dates listed). The notes are as follows: Due Date Amount due Interest rate May 1, 2014 $ 170,000 6% Feb. 28, 2015 100,000 7% April 15, 2015 300,000 8% Nov. 31, 2016 200,000 5% 3. Rushtop uses the expense approach to account for warranties. The company has a two-year warranty on selected products, with an estimated cost of 1% of sales being returned in the 12 months following the sale, and a cost of 1.5% of sales being returned int months 13 to 24 following sale. The warranty liability outstanding at March 31, 2013, was $5,700. Sale of warrantied products in the year ended March 31, 2014 were $154,000. Actual warranty costs incurred during the current fiscal year are as follows: Warranty claims honoured on 2012-2013 sales $ 6,000 Warranty claims honoured on 2013-2014 sales 1,200 $ 7,200 4. Regular trade payables for supplies and purchases of goods and services on open account are $414,000 at March 31, 2014. Included in this amount is a loan of $23,000 owing to an affiliated company. 5. The following information relates to Rushtop’s payroll for the month of March 31, 2014. The company’s required contribution to EI is 1.4 times that of the employee contribution; for CPP it is 1.0 times that of the employee contribution. Salaries and wages outstanding at March 31, 2014 $ 190,000 EI withheld from employees 8,600 CPP withheld from employees 15,800 Income tax withheld from employees 53,500 Union dues withheld from employees 18,600 6. Rushtop regularly pays HST owing to the government on the 15 of the month following the transactions. Rushtop’s HST transactions include the HST that it charges to customers and the HST that it is charged by suppliers. During March 2014, purchases attracted $34,000 of HST, while the HST charged on invoices to customers totalled $46,500. At February 28, 2014, the balances in the HST receivable and the HST payable accounts were $26,800 and $51,000, respectively. 7. Other miscellaneous liabilities included $60,000 of dividends payable on April 15, 2014; $20,000 of bonuses payable to company executives (60% payable in October 2014 and 40% payable the following April); and $80,000 in accrued auditing fees covering the year ended March 31, 2014. 8. Rushtop sells gift cards to its customers. The company does not set a redemption date and customers can use their cards at any time. At April 1, 2013, Rushtop had a balance outstanding of $860,000 in its Unearned Revenues – Gift Cards account. The company received $240,000 in cash for gift cards purchased during the current year and $330,000 in redemption took place during the year. Based on past experience, 25% of customer gift card balances never get redeemed. At the end of each year, Rushtop recognizes 25% of the opening balance of Unearned Revenues as earned during the year. Instructions Prepare the current liability section of the March 31, 2014 balance sheet of Rushtop Ltd. Identify any amounts that require separate presentation or disclosure under ASPE. If you have excluded any items from the category of current liabilities, explain why you left them out
manufactured a broad range of quality .

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