9th Edition

ISBN: 9781260216141

Author: SPICELAND

Publisher: MCG CUSTOM

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Chapter 13, Problem 13.7E

Customer deposits

• LO13–3

Diversified Semiconductors sells perishable electronic components. Some must be shipped and stored in reusable protective containers. Customers pay a deposit for each container received. The deposit is equal to the container’s cost. They receive a refund when the container is returned. During 2018, deposits collected on containers shipped were $850,000.

Deposits are forfeited if containers are not returned within 18 months. Containers held by customers at January 1, 2018, represented deposits of $530,000. In 2018, $790,000 was refunded and deposits forfeited were $35,000.

Required:

1. Prepare the appropriate journal entries for the deposits received and returned during 2018.
2. Determine the liability for refundable deposits to be reported on the December 31, 2018, balance sheet.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Chapter 13, Problem 13.6E

Chapter 13, Problem 13.8E

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Chapter 13 Solutions

INTERMEDIATE ACCOUNTING(LL)-W/CONNECT

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