Question: Merridian Marine experienced these events during the current year a

Merridian Marine experienced these events during the current year.
a. December revenue totaled $145,000; and, in addition, Merridian collected sales tax of 7%. The tax amount will be sent to the state of Mississippi early in January.
b. On August 31, Merridian signed a six-month, 6% note payable to purchase a boat costing $76,000. The note requires payment of principal and interest at maturity.
c. On August 31, Merridian received cash of $3,600 in advance for service revenue. This revenue will be earned evenly over six months.
d. Revenues of $850,000 were covered by Merridian’s service warranty. At January 1, estimated warranty payable was $9,700. During the year, Merridian recorded warranty expense of $34,000 and paid warranty claims of $31,100.
e. Merridian owes $90,000 on a long-term note payable. At December 31, 4% interest for the year plus $30,000 of this principal are payable within one year.

1. For each item, indicate the account and the related amount to be reported as a current liability on the Merridian Marine balance sheet at December 31.

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  • CreatedJuly 25, 2014
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