Question

Following are pertinent facts about events during the current year at Greely Snowboards.
a. December sales totalled $404,000, and Greely collected sales tax of 5%. The sales tax will be sent to Ontario early in January.
b. Greely owes $75,000 on a long-term note payable. At December 31,6% interest for the year plus $25,000 of principal are payable within one year.
c. On August 31, Greely signed a six-month, 6% note payable to purchase a machine costing $80,000. The note requires payment of principal and interest at maturity.
d. Sales of $909,000 were covered by the Greely product warranty. At January 1, estimated warranty payable was $11,300. During the year, Greely recorded warranty expense of $27,900 and paid warranty claims of $30,100.
e. On October 31, Greely received cash of $2,400 in advance for the rent on a building. This rent will be earned evenly over six months.
Requirement
1. For each item, indicate the account and the related amount to be reported as a current liability on Greely’s December 31 balance sheet.


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  • CreatedJuly 08, 2015
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