Question

Listed Below are selected transactions of Schultz Department Store for the current year ending Dec. 2017

1. On December 5, the store received $500 from the Selig Players as a deposit to be returned after certain furniture to be used in stage production on January 15, 2018.

2. During December, cash sales totaled 798,000, which includes the 5% sale tax that must be remitted to the state by the 15th day of the following month.

3. Schultz Department Store provides paid vacations to its employees. At Dec. 31, 2017, 30 employees have each earned 2 weeks of vacation time. The employees' average salary is $450 per week.

4. On January 1, 2017, Schultz Department Store issued $600,000 of 7% bonds, due in 10 years. The bond were issued for 559,224 and pay interest July 1 and January 1. Schultz using the straight-line method. The effective interest rate was 8%

5. At December 31,2017, Schultz is involved with a lawsuit . The attorney for the company determined that is is probable that Schultz will loss the case and that a reaonable estimate of damages to be paid by Schultz is $300,000

6. The company has an outstanding notes payable at December 31, 2017 in the amount of 225,000. The note payable is due in installment of 25,000 per quarter. (ignore interest portion)

Prepare IN GOOD FORM the liability section of the balance sheet at December 31, 2017

Answer 1

The answer is given below:Thanks

Schultx Departmental Store
Balance Sheet ( Partial )					WN
31-Dec-17					Bond Amortization Schedule:
Liabilities	$	$
Current Liabilities						Amount Paid	Interest Expense	Discount Amortization	Bond Discount	Bonds Payable
Interest Payable	21,000				1-Jan-17				40776($600000-$559224)	559224($600000-$40776)
Deposits from Customers	500				1-Jul-17	21,000	22,369	1369($22369-$21000)	39407($40776-$1369)	560593($600000-$39407)
Sales Tax Payable	39,900				31-Dec-17	21,000	22,424	1424($22424-$21000)	37983($39407-$1424)	562017($600000-$37983)
Accrued Vacation Pay	27,000
Note Payable ( Short Term )	100,000				Sales tax Payable
Total Current Liabilities		188,400			$798000*5%	$39,900
Long Term Liabilities					Accrued Vacation Pay
Bonds Payable	600,000				30 employees * 2 weeks *$450	$27,000
Less: Unamortized Discount	-37,983	562,017
Note Payable ( Long Tem )		125,000			interest calculated as follows:
Total Long-term Liabilities		687,017			$559224*8%/2 half yearly		$22,369
Other Liabilities
Estimated Litigation Liability		300,000			Amount paid as expense
Total Liabilities		$1,175,417			$600000*7%/2 half yrly		$21,000