Following are pertinent facts about events during the current year at Z Boyz Sno

Question

Following are pertinent facts about events during the current year at Z Boyz Snowboards.

Requirement

1.

Z Boyz Snowboards' December 31 balance sheet. Round calculations to the nearest dollar.

More Info

a

b.

Z Boyz owes 85,000 on a? long-term note payable. At December? 31,

7 percent interest for the year plus $15,000 of principal are payable within one year.

c.

d.

e.

On October? 31, Z Boyz received cash of $2,850 in advance for the rent on a building. This rent will be earned evenly over six months.

I am having trouble with this question, could you guys help me to find out the soluation?

Thanks!

1.

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

Z Boyz Snowboards' December 31 balance sheet. Round calculations to the nearest dollar.

More Info

a

December sales totaled $404,000?, and Z Boyz collected sales tax of 4
percent. The sales tax will be sent to the state of Oregon early in January.

b.

Z Boyz owes 85,000 on a? long-term note payable. At December? 31,

7 percent interest for the year plus $15,000 of principal are payable within one year.

c.

On August? 31, Z Boyzsigned a? six-month,77 percent note payable to purchase a machine costing $84,000. The note requires payment of principal and interest at maturity.

d.

Sales of $909,000 were covered by the Z Boyz product warranty. At January? 1, estimated warranty payable was $12,000. During the? year, Z Boyz
recorded warranty expense of $26,400
and paid warranty claims of $30,600.

e.

On October? 31, Z Boyz received cash of $2,850 in advance for the rent on a building. This rent will be earned evenly over six months.

Explanation / Answer

Z Boyz Snowboards Current liabilities; $ Sales tax payable ( $ 404,000 x 4% )                  16,160 Note payable ( due within one year)                  15,000 Accrued inteterst payable ( $ 85,000 x 7% )                    5,950 Six-month, 77% note payable                  84,000 Accrued inteterst payable ( $ 84,000 x 77% x 4/12 )                  21,560 Waranty payable ( $ 12,000 + $ 26,400 - $ 30,600 )                    7,800 Unearned rent revenue ( $ 2,850 x 4/6 )                    1,900 Total current liabilities                152,370

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