(Learning Objective 1: Measuring current liabilities) Sea Breeze Marine experienced these events during the current year. a....
Question:
(Learning Objective 1: Measuring current liabilities) Sea Breeze Marine experienced these events during the current year.
a. December revenue totaled €110,000, and in addition, Sea Breeze collected sales tax of 8%. The tax amount will be sent to the Groningen provincial offi ce early in January.
b. On August 31, Sea Breeze signed a six-month, 4% note payable to purchase a boat costing €82,000. The note requires payment of principal and interest at maturity.
c. On August 31, Sea Breeze received cash of €1,200 in advance for service revenue.
This revenue will be earned evenly over six months.
d. Revenues of €750,000 were covered by Sea Breeze’s service warranty. At January 1, provision for warranty repairs was €11,400. During the year, Sea Breeze recorded warranty expense of €30,000 and paid warranty claims of €34,600.
e. Sea Breeze owes €85,000 on a long-term note payable. At December 31, 10% interest for the year plus €25,000 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 Sea Breeze Marine balance sheet at December 31.
Step by Step Answer:
Financial Accounting International Financial Reporting Standards
ISBN: 9780273777809
1st Global Edition
Authors: Walter T Harrison, Charles Horngren, Bill Thomas, Themin Suwardy