Following are pertinent facts about events during the curren

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.

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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.

Solution

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