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E5.10 (LO 1, 2) (Current Liabilities) Norma Smith is the controller of Baylor Corporation and is responsible for the preparation of the year-end financial statements.
E5.10 (LO 1, 2) (Current Liabilities) 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.For each of the following transactions occurred during the year, indicate the dollar amount to be reported as a current liability as of December 31, 2014. (Do not leave any answer field blank. Enter 0 for amounts.)
- On December 20, 2020, a former employee filed a legal action against Baylor for $100,000 for wrong- ful dismissal. Management believes the action to be frivolous and without merit. The likelihood of payment to the employee is remote.
- Bonuses to key employees based on net income for 2020 are estimated to be $150,000.
- On December 1, 2020, the company borrowed $600,000 at 8% per year. Interest is paid quarterly.
- Accounts receivable at December 31, 2020, is $10,000,000. An aging analysis indicates that Baylors expense provision for doubtful accounts is estimated to be 3% of the receivables balance.
- On December 15, 2020, the company declared a $2.00 per share dividend on the 40,000 shares of common stock outstanding, to be paid on January 5, 2021.
- During the year, customer advances of $160,000 were received; $50,000 of this amount was earned by December 31, 2020.
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