Exam 2: Current Liabilities

On March 1,2020,Jaiku Industrial gave Light Co.a 180-day,8%,$78,000 note payable to extend a past due account payable.Prepare the journal entry for Jaiku Industrial to record payment of the note on August 28,2020.Jaiku Industrial recorded a April 30^th year end adjusting entry.

Honest Computers sells computers with a 6-month warranty.In January,the company sold 35,000 computers at $2,600 each and 1,500 computers were returned for repairs.The total repair costs amounted to $185,000.It is estimated that 3% of all units sold will need repairs under warranty at an estimated cost of $300 per unit.Prepare the journal entry to record warranty expense for January.

The current portion of long-term debt

A short-term note payable

Which of the following accounting policy is being observed when we recognize a warranty obligation?

On June 5,BB Company borrowed $120,000 from AH Bank.The loan had an interest rate of 10% and was due in 90 days.BB Company's fiscal year-end is June 30.Prepare the journal entry to record the year-end interest accrual.

Both partnerships and corporations calculate an income tax liability based on their taxable incomes,but proprietorships do not.

Estimated liabilities include employee health benefits,property taxes,and warranties.

Explain the difference between current and long-term liabilities.

Short-term notes payable

Discuss the types of estimated liabilities.