(Learning Objective 1: Measure and report current liabilities) Gulfshore Marine experienced these events during the current year.
a. December revenue totaled $180,000; and, in addition, Gulfshore collected sales tax of 6%. The tax amount will be sent to the state of Alabama early in January.
b. On August 31, Gulfshore signed a six-month, 4% note payable to purchase a boat costing $78,000. The note requires payment of principal and interest at maturity.
c. On August 31, Gulfshore received cash of $5,000 in advance for service revenue. This revenue will be earned evenly over six months.
d. Revenues of $800,000 were covered by Gulfshore’s service warranty. At January 1, estimated warranty payable was $9,600. During the year, Gulfshore recorded warranty expense of $32,000 and paid warranty claims of $29,900.
e. Gulfshore owes $100,000 on a long-term note payable. At December 31, 3.5% interest for the year plus $20,000 of this principal are payable within one year.