Big Wave Marine experienced these events during the current year.

a. December revenue totaled $110,000; and, in addition, Big Wave collected sales tax of 7%. The tax amount will be sent to the state of Delaware early in January.

b. On August 31, Big Wave signed a six-month, 9% note payable to purchase a boat costing $94,000. The note requires payment of principal and interest at maturity.

c. On August 31, Big Wave 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 Big Wave’s service warranty. At January 1, accrued warranty payable was $11,800. During the year, Big Wave recorded warranty expense of $34,000 and paid warranty claims of $34,600.

e. Big Wave owes $100,000 on a long-term note payable. At December 31, 10% interest for the year plus $30,000 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.