Coolfroth Brewing Company distributes its products in an aluminum keg. Customers are charged a deposit of $30 per keg; deposits are recorded in the Keg Deposits account.
Problem 1: Where on the balance sheet will the Keg Deposits account be found?
Are Keg deposits a current Assets on the balance sheet, or a current liability on the balance sheet?
Problem 2: Use the horizontal model to show the effect of giving a keg deposit refund to a customer. (Enter decreases to account balances with a minus sign.)
Problem 3: Record the journal entry to show the effect of giving a keg deposit refund to a customer.
Problem 4: A keg use analyst who works for Coolfroth estimates that 475 kegs for which deposits were received during the year will never be returned. What accounting, if any, would be appropriate for the deposits associated with these kegs? (Enter decreases to account balances with a minus sign.)
Problem 5: A keg use analyst who works for Coolfroth estimates that 475 kegs for which deposits were received during the year will never be returned. Record the accounting that would be appropriate for the deposits associated with these kegs?
Problem 6: Record the accounting that would be appropriate for the cost of the kegs that are purchased and used by Coolfroth Brewing Company, including how to account for unreturned kegs?