$ 150 comma 000$150,000?; Sea BreezeSea Breeze 88?%. OregonOregon b. Sea BreezeS

Question

$ 150 comma 000$150,000?;

Sea BreezeSea Breeze

88?%.

OregonOregon

b.

Sea BreezeSea Breeze

66?%

$ 94 comma 000$94,000.

c.

Sea BreezeSea Breeze

$ 1 comma 800$1,800

d.

$ 825 comma 000$825,000

Sea BreezeSea Breeze?'s

$ 11 comma 600$11,600.

Sea BreezeSea Breeze

$ 33 comma 000$33,000

$ 34 comma 700$34,700.

e.

Sea BreezeSea Breeze

$ 80 comma 000$80,000

12 %12%

$ 25 comma 000$25,000

of this principal are payable within one year.

For each? item, indicate the account and the related amount to be reported as a current liability on the

Sea BreezeSea Breeze

Marine balance sheet at December 31

December revenue totaled

$ 150 comma 000$150,000?;

?and, in? addition,

Sea BreezeSea Breeze

collected sales tax of

88?%.

The tax amount will be sent to the state of

OregonOregon

early in January.

b.

On August? 31,

Sea BreezeSea Breeze

signed a? six-month,

66?%

note payable to purchase a boat costing

$ 94 comma 000$94,000.

The note requires payment of principal and interest at maturity.

c.

On August? 31,

Sea BreezeSea Breeze

received cash of

$ 1 comma 800$1,800

in advance for service revenue. This revenue will be earned evenly over six months.

d.

Revenues of

$ 825 comma 000$825,000

were covered by

Sea BreezeSea Breeze?'s

service warranty. At January? 1, estimated warranty payable was

$ 11 comma 600$11,600.

During the? year,

Sea BreezeSea Breeze

recorded warranty expense of

$ 33 comma 000$33,000

and paid warranty claims of

$ 34 comma 700$34,700.

e.

Sea BreezeSea Breeze

owes

$ 80 comma 000$80,000

on a? long-term note payable. At December? 31,

12 %12%

interest for the year plus

$ 25 comma 000$25,000

of this principal are payable within one year.

For each? item, indicate the account and the related amount to be reported as a current liability on the

Sea BreezeSea Breeze

Marine balance sheet at December 31

Explanation / Answer

Solution:

For each? item, indicating the account and the related amount to be reported as a current liability on the Sea Breeze Marine balance sheet at December 31:

a. Sales tax payable ($150,000 x 0.08) .........................$12,000

b. Note payable, short-term ........................................$94,000

Interest payable ($94,000 × 0.06 × 4/12) ...................$1,880

c. Unearned service revenue ($1,800 × 4/6) ...............$1,200

d. Estimated warranty payable ($11,600 + $33,000 ? $34,700)...........................$9,900

e. Portion of long-term note payable due within one year ....................................................$25,000

Interest payable ($80,000 × 0.12) ..............................$9,600

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