Question

Assume that McKinley Electronics completed these selected transactions during March 2016​:

a. Sales of $ 2, 400, 000 are subject to estimated warranty cost of 5%. The estimated warranty payable at the beginning of the year was $ 36, 000, and warranty payments for the year totaled $ 53, 000.

b. On March 1, McKinley Electronics signed a $ 45, 000 note payable that requires annual payments of $ 9, 000 plus 6% interest on the unpaid balance each March 2.

c. Jacob, Inc., a chain of discount stores, ordered $ 145, 000 worth of wireless speakers and related products. With its order, Jacob, Inc., sent a check for $ 145, 000 in advance, and McKinley shipped $ 70 ,000 of the goods. McKinley will ship the remainder of the goods on April 3, 2016.

d. The March payroll of $ 300, 000 is subject to employee withheld income tax of $ 30,000 and FICA tax of 7.65%. On March 31, McKinley pays employees their take-home pay and accrues all tax amounts.

Select the statement account and label - Current Liabilities or Long - term Liabilities.

Calculate each​ accounts' balance and the total current liability amount at March 31​, 2016. ​(For the FICA​ tax, be sure to include both the employer and employee share of the tax. Round all amounts to the nearest whole dollar. If a box is not used in the table leave the box​ empty; do not select a label or enter a​ zero.)

Answer 1

Current Liability: The Liability which is payable in less the 1 year

Long-term liability - The liability which is payable beyond 1 year

Balance sheet (Partial)

Current portion of Long-term note Payable	$           9,000
Interest Payable (45000*6%*1/12)	$              225
Estimated Warranty Payable (36000+2400000*5%-53000)	$      103,000
Unearned Sales Revenue (145000-70000)	$         75,000
Employee Income Tax Wit-held Payable	$         30,000
FICA Tax Payable (300000*7.65%*2)	$         45,900
Total Current Liabilities	$      263,125
Long-term Liabilities:
Note Payable (45000-9000)	$         36,000
Total Long-term Liabilities	$        36,000