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Group B
LO 1, 2, 3, 4
(Learning Objectives 1, 2, 3, 4: Measure and report current liabilities) Big Wave Marine experienced these events during the current year.
a. December revenue totaled $110,000; and, in addition, Big Wave collected sales tax of 7%. The tax amount will be sent to the state of Delaware early in January
b. On August 31, Big Wave signed a six-month. 9% note payable to purchase a boat costing $94,000. The note requires payment of principal and interest at maturity
c. On August 31, Big Wave received cash of $3,600 in advance for service revenue. This revenue will be earned evenly over six months
d. Revenues of S850.000 were covered by Big Wave’s service warranty. At January 1, accrued warranty payable was $11.800. During the year, Big Wave recorded warranty expense of $34,000 and paid warranty claims of $34,600.
e. Big Wave owes $100,000 on a long-term note payable At December 31, 10% interest for the year plus S30.000 of this principal are payable within one year.
Requirement
1. For each item, indicate the account and the related amount to be reported as a current liability on the Big Wave Marine
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Chapter 8 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
- The standard cost of Wonder Walkers includes 3 units of direct materials at $9.00 per unit. During July, the company buys 40,000 units of direct materials at $8.25 and uses those materials to produce 15,000 units. Compute the total, price, and quantity variances for materials.arrow_forwardBranson paid $465,000 cash for all of the outstanding common stock of Wolfpack, Incorporated, on January 1, 2023. On that date, the subsidiary had a book value of $340,000 (common stock of $200,000 and retained earnings of $140,000), although various unrecorded royalty agreements (10-year remaining life) were assessed at a $100,000 fair value. Any remaining excess fair value was considered goodwill. In negotiating the acquisition price, Branson also promised to pay Wolfpack's former owners an additional $50,000 if Wolfpack's income exceeded $120,000 total over the first two years after the acquisition. At the acquisition date, Branson estimated the probability-adjusted present value of this contingent consideration at $35,000. On December 31, 2023, based on Wolfpack's earnings to date, Branson increased the value of the contingency to $40,000. During the subsequent two years, Wolfpack reported the following amounts for income and dividends: Dividends Declared Year Net Income $ 65,000…arrow_forwardAnswer? ? Financial accounting questionarrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
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