Following are pertinent facts about events during the current year at Lerner Snowboards.
a. December sales totaled $402,000, and Lerner collected sales tax of 8%. The sales tax will be sent to the state of Washington early in January.
b. Lerner owes $75,000 on a long-term note payable. At December 31, 5% interest for the year plus $20,000 of principal are payable within one year.
c. On August 31, Lerner signed a six-month, 8% note payable to purchase a machine costing $84,000. The note requires payment of principal and interest at maturity.
d. Sales of $962,000 were covered by a Lerner product warranty. At January 1, estimated warranty payable was $11,700. During the year, Lerner recorded warranty expense of $29,000 and paid warranty claims of $30,075.
e. On October 31, Lerner received cash of $3,990 in advance for the rent on a building. This rent will be earned evenly over six months.
1. For each item, indicate the account and the related amount to be reported as a current liability on Lerner’s December 31 balance sheet.