NightWoundsTime Brewing Company distributes its products in an aluminum keg. Customers are charged a deposit of $$40$ per keg; deposits are recorded in the Keg Deposits account.

Exercise $7-13($Algo$)$ Part c $-$ Horizontal model

c$-1.$ A keg use analyst who works for NightWoundsTime estimates that $290$ kegs for which deposits were received during the year will never be returned. What accounting, if any, would be appropriate for the deposits associated with these kegs? Indicate the financial statement effect.