Current liabilities: entries and disclosure. A review of selected financial activities of Visconti’s during 20XX disclosed the following: 12/1: Borrowed $20,00
I need help with Chapter 7, Problem 2. The months I need results for
are May-June. I have enclosed the question below and attached the work that I have done thus far.
Current liabilities: entries and disclosure. A review of selected financial activities of Visconti’s during 20XX disclosed the following:
12/1: Borrowed $20,000 from the First City Bank by signing a 3- month, 15% note payable. Interest and principal are due at maturity. 2/10: Established a warranty liability for the XY-80, a new product. Sales are expected to total 1,000 units during the month. Past experience with similar products indicates that 2% of the units will require repair, with warranty costs averaging $27 per unit. 12/22: Purchased $16,000 of merchandise on account from Oregon Company, terms 2/10, n/30. 12/26: Borrowed $5,000 from First City Bank; signed a $5,120 note payable due in 60 days. 12/31: Repaired six XY-80s during the month at a total cost of $162. 12/31: Accrued 3 days of salaries at a total cost of $1,400. 12/31: Accrued vacation pay amounting to 6% of December’s $36,000 total wage and salary expense. Instructions a. Prepare journal entries to record the preceding transactions and events. b. Determine accrued interest as of December 31, 20XX, and prepare the necessary adjusting entry or entries. c. Prepare the current liability section of Visconti’s December 31, 20XX balance sheet.
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