For each of the following situations, indicate the liability amount, if any, which is reported on the balance sheet of Hirst Inc. at December 31, 2015.a. Hirst owes $110,000 at year end 2015 for its inventory purchases.b. Hirst agrees to purchase a $28,000 drill press in January 2016.c. During November & December 2015, Hirst sold products to a firm with a 90 day warranty against product failure. Estimate 2016 costs of honoring the warranty are $2,200. d. Hirst provided a profit-sharing bonus for its executives equal to 5% of its reported pre-tax annual income. The estimated pretax income for 2015-is $500,00. Bonuses are not paid until January of the following year.
For each of the following situations, indicate the liability amount, if any, which is reported on the
a. Hirst owes $110,000 at year end 2015 for its inventory purchases.
b. Hirst agrees to purchase a $28,000 drill press in January 2016.
c. During November & December 2015, Hirst sold products to a firm with a 90 day warranty against product failure. Estimate 2016 costs of honoring the warranty are $2,200.
d. Hirst provided a profit-sharing bonus for its executives equal to 5% of its reported pre-tax annual income. The estimated pretax income for 2015-is $500,00. Bonuses are not paid until January of the following year.
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