Harris Pilton requires your assistance in handling a few accounting issues.

Harris Pilton borrowed $15,000 on a 90-day, 5% note payable on October 19th, 2020.

Harris Pilton sold inventory for a sales revenue of $12,000 on July 10th, 2020, which included a 3% sales tax and a 6-month service-type warranty. The firm did not segregate its sales revenue from its sales taxes payable. Further, the firm estimates that 2% of sales are usually defective. On September 1, 2020, a customer returned a defective inventory item costing $60.

Instructions

Compute the amount of interest that must be accrued at December 31, 2020.

Compute the amount of sales taxes payable that must be recorded at December 31, 2020.

Compute the value of the estimated warranty liability at December 31, 2020.

Computations:

Interest payable:

Sales taxes payable:

Estimated warranty liability: