Chapter 8, Problem 8.28BE

(Learning Objectives 1, 2, 3, 4: Report current and long-term liabilities) Western Electronics completed these selected transactions during March 2018:

  a.    Sales of $2,400,000 are subject to an accrued warranty cost of 9%. The accrued warranty payable at the beginning of the year was $37,000, and warranty payments for the year totaled $59,000.

  b.    On March 1, Western signed a $20,000 note payable that requires annual payments of $4,000 plus 6% interest on the unpaid balance beginning March 1, 2019.

  c.    Urban, Inc., a chain of discount stores, ordered $140,000 worth of wireless speakers and related products. With its order, Urban, Inc., sent a check for $140,000, and Western shipped $55,000 of the goods. Western will ship the remainder of the goods on April 3, 2018.

  d.    Western’s March payroll of $260,000 is subject to employee withheld income tax of $30,500 and FICA tax of 7.65%. On March 30, Western pays employees their take-home pay and accrues all tax amounts.

 Requirement

  1.     Report these items on Western Electronics’ balance sheet at March 31, 2018.