The Kelly Company purchased a building for $75,000 in cash. What is the effect on current assets?
A company had $250,000 of current assets and $90,000 of current liabilities before borrowing $60,000 from the bank with a 3-month note payable. What effect did the borrowing transaction have on the amount of the company’s current ratio?
Listed below are selected items from the financial statements of a company for the year ended December 31, Year 1.
| Salaries Payable | 63,000 |
| Accounts payable | 35,000 |
| Current Maturity of Long-Term Debt | 25,000 |
| Bonds payable, due December 31, Year 20 | 2,200,000 |
| Premium on Bonds Payable | 14,000 |
| Estimated Warranty Liability | 10,000 |
| Note Payable, due Dec. 31, Year 4 | 75,000 |
| Unearned Revenue | 25,000 |
| Note Payable, due June 1, Year 2 | 8,000 |
| Discount on Note Payable due June 1, Year 2 | 500 |
A company estimates the cost of products warranties to be 3% of sales. The beginning balance in Estimated Warranty Liability account is $15,000. Sales for the period was $795,000. During the period, $32,600 was actually paid for warranty related costs. What is the ending balance in the Warranty Liability account?
A company provides a warranty on its products that it sells to customers. The warranty liability account had $1,200 balance on April 1. The company had sales of $67,000 in April and estimated warranty repairs at 3% of sales. During the month, the company actually paid out $2,400 for warranty repairs.
Determine the April 30 balance in the estimated warranty liability account.
| Accounts payable | $12,000 | Accounts Receivable | 20,900 |
| Furniture | 5,000 | Accumulated Depreciation | 6,500 |
| Building | 82,000 | Cash | 21,500 |
| Common Stock | ? | Sales Revenue | 90,700 |
| Cost of Goods Sold | 51,500 | Depreciation Expense | 1,450 |
| Dividends | 6,600 | Note Payable (due 3/1 Year 4) | 20,000 |
| Marketable Securities | 1,400 | Prepaid Expenses | 18,000 |
| Salaries Payable | 2,800 | Land | 38,000 |
| Note Payable (due 5/30 Year 2) | 12,400 | Service Revenue | 22,550 |
| Retained Earnings (1/1 Year 1 ) | 39,700 | Salary Expense | 18,000 |
| Accrued Expenses Payable | 1,500 | Unearned Revenue | 30,500 |
| Utilities Expense | 5,400 |