Norma Smith is the controller of Baylor Corporation and is responsible for the preparation of the year-end
Question:
Norma Smith is the controller of Baylor Corporation and is responsible for the preparation of the year-end financial statements. The following transactions occurred during the year.
a. Bonuses to key employees based on net income for 2025 are estimated to be $150,000.
b. On December 1, 2025, the company borrowed $600,000 at 8% per year. Interest is paid quarterly.
c. Accounts receivable at December 31, 2025, is $10,000,000. An aging analysis indicates that Baylor’s expense provision for doubtful accounts is estimated to be 3% of the receivables balance.
d. On December 15, 2025, the company declared a $2.00 per share dividend on the 40,000 shares of common stock outstanding, to be paid on January 5, 2026.
e. During the year, customer advances of $160,000 were received; $50,000 of this amount was earned by December 31, 2025.
Instructions
For each item above, indicate the dollar amount to be reported as a current liability as of December 31, 2025. If a liability is not reported, explain why.
Step by Step Answer:
Intermediate Accounting
ISBN: 9781119790976
18th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield