CHAPTER $10$ Current Liabilities

c$.$ The annual depreciation expense for the delivery truck that was acquired during the year $($calculated to the nearest month$).$

d$.$ The annual depreciation expense for the equipment that was in use during the year.

e$.$ The correct ending balances of the Home Staging Consulting Revenue and Unearned Home Staging Consulting Revenue accounts.

f$.$ The correct ending balances of the accounts for Warranty Expense and Estimated Warranty Liability.

g$.$ The correct ending balance of the Interest Expense account. $($Round amounts to the nearest whole dollar.$)$

h$.$ The cost of goods sold for the year.

$2.$ Use the results of requirement $1$ to complete the six$-$column table by first entering the appropriate adjustments for items $($a$)$ through $($h$)$ and then completing the adjusted trial balance columns. $($Hint: Item

$($b$)$ requires two entries.$)$

$3.$ Present general journal entries to record the adjustments entered on the six$-$column table.

$4.$ Present a single$-$step income statement, a statement of changes in equity, and a classified balance sheet.

Answers to Critical Thinking Challenge

Working capital management is key to businesses staying afloat. Companies need sufficient cash flow to cover day$-$to$-$day purchase obligations. If sufficient cash flow is not being generated by the business to cover costs to purchase supplies and to pay for the company's current portion of debt payments and other obligations, the company will not be able to sustain operations for the long term.