Name SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 1) Explain the difference between current and long-term liabilities. 2) Explain known current liabilities. 3) Discuss the types of estimated liabilities. 4) Discuss how to account for contingent liabilities. 5) Breathe Therapeutic Company is located in Medicine Hat, Alberta and is a retailer of massage supplies. Beginning inventory is $70,000, and Breathe uses the perpetual inventory system. Complete the journal entries on the following dates, including 5% GST as applicable. Oct-01 Oct-12 Breathe purchases $40,000 of merchandise from Robyn Massage Corp for cash. Breathe sells $52,000 of massage products to a customer on credit terms n/45. The merchandise cost $40,000. The customer pays for the October 12th sale. Breathe remits the appropriate amount of GST to the government for the month of October Oct-31 Nov-10 6) On November 16, 2015, Williams Industrial gave Phillip Co. a 90-day, 8%, $80,000 note payable to extend a past due account payable. 6) Prepare the journal entry for Williams Industrial to record payment of the note on Feb 14, 2016. Williams Industrial recorded a December 31st year end adjusting entry 7) 7) On November 16, Predator Company borrowed $112,000 from DT Bank. The loan had an interest rate of 10% and was due in 90 days. Predator Company's fiscal year-end is December 31. Prepare the journal entry to record the payment of the note on Predator's books. 8)_ 8) A company sells its product subject to a warranty that covers the cost of parts and labour for repairs during the six months after sale. Warranty costs are estimated to be 4.5% of sales for parts, and 1.5% of sales for labour. During the month of June, the company performed warranty work and used $8,000 worth of parts and paid $4,000 in wages for labour to do the warranty work. Sales for June amounted to $450,000. (1) What account should be debited for the S4,000 in labour? (2) What should be the amount of estimated warranty expense for June? (3) If the Estimated Warranty Liability account had a $10,000 credit balance on May 31, what should be the account balance as of June 302 9) Buy Best Company sells personal computers for $2,300 each. The price includes a two-year warranty. During 2015, the company sells 600 computers. On the basis of past experience, the warranty costs are estimated to be S150 per computer. The actual warranty costs paid by Buy Best during 2015 were $45,000. Prepare general journal entries to record the estimated warranty expense and the warranty payments during 2015. 10) 10) During November 2017, Sunset Airlines sold out all of its cight flights going from Toronto to Cuba. Two flights depart in December, 2017 and six flights depart in January 2018, Sunset collected $1,960,000 in November 2017 for the flights. Sunset's year end is December 31. Required: What adjusting entry would be needed to recognize revenue for 2017? Date the entry. What would be the value of the liability on Sunset's Balance Sheet at December 31, 2017? State if the liability is current or non-current
