Oriental Rug Company completed these selected transactions during December 2006, its first month of operations. a. Sales
Question:
Oriental Rug Company completed these selected transactions during December 2006, its first month of operations.
a. Sales of \(\$ 200,000\) are subject to estimated warranty cost of \(3 \%\).
b. Pier 1 Imports ordered \(\$ 15,000\) of rugs. With its order, Pier 1 sent a check for \(\$ 15,000\) in advance. Oriental Rugs will ship the goods in January 2007.
c. The INecember payroll of \(\$ 90,000\) is subject to employee withheld income tax of \(9 \%\) and FICA tax of \(8 \%\). Oriental Rugs must also pay FIC A tax of \(8 \%\) plus state unemployment tax of \(5.4 \%\) and federal unemployment tax of \(0.8 \%\). On December 31, Oriental Rugs pays employees their net pay, but accrues all tax amounts.
Requirement
Report each item at its correct amount on Oriental Rugs' balance sheet at December 31, 2006. Show total current liabilities.
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