Recording the correct amount on balance sheet


Response to the following problem:

Assume that Wilson Sporting Goods completed these selected transactions during December 20X4.

a. Sales of $500,000 are subject to estimated warranty cost of 3%.

b. Champs, a chain of sporting goods stores, ordered $9,000 of tennis and golf equipment. With its order, Champs sent a check for $9,000 in advance. Wilson will ship the goods on January 3, 20X5.

c. The December payroll of $200,0000 is subject to employee withheld income tax of 9%, FICA tax of 8% (employee and employer), state unemployment tax of 5.4%, and federal unemployment tax of 0.8%. On December 31, Wilson pays employees but accrues all tax amounts.

Required

Report each item at its correct amount on Wilson's balance sheet at December 31, 20X1. Show total current liabilities.

 

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Accounting Basics: Recording the correct amount on balance sheet
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