(Learning Objective 1: Measuring current liabilities) Big Wave Marine experienced these events during the current year.

a. Its December revenue totaled $120,000, and in addition, Big Wave collected sales tax of 5%. The tax amount will be sent to the Hanoi Municipality early in January.

b. On August 31, Big Wave signed a six-month, 4% note payable to purchase a boat costing $85,000. The note requires payment of principal and interest at maturity.

c. On August 31, Big Wave received cash of $2,400 in advance for service revenue. This revenue will be earned evenly over six months.

d. Revenues of $850,000 were covered by Big Wave’s service warranty. At January 1, provision for warranty repairs was $11,600. During the year, Big Wave recorded warranty expense of $34,000 and paid warranty claims of $34,800.

e. Big Wave owes $70,000 on a long-term note payable. At December 31, 12% interest for the year plus $35,000 of this principal are payable within one year.

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