Diversified Semiconductors sells perishable electronic components. Some must be shipped and stored in reusable protective containers. Customers pay a deposit for each container received. The deposit is equal to the container's cost. They receive a refund when the container is returned. During 2021, deposits collected on containers shipped were $910,000.

Deposits are forfeited if containers are not returned within 18 months. Containers held by customers at January 1, 2021, represented deposits of $577,000. In 2021, $807,000 was refunded and deposits forfeited were $43,500.

Required:

1.Prepare the appropriate journal entries for the deposits received,returned, and forfeited during 2021.

2.Determine the liability for refundable deposits to be reported on the December 31, 2021, balance sheet.