current liabilities - terrytube.net

Current Liabilities

Short Term liabilities vs. Long Term Liabilities

o Sales Tax Payable

o Income Tax Payable

o Unearned Revenue

o Notes Payable (Interest not in the face)

o Discounted Notes Payable (Interest in the face – banks way of doing

notes)

o Vacation Pay/Warranties (Same concept as Allowance for DA)

Dec 31

Campbell electronics sells $1,000,000 in cell phones and offers a warranty

(cash back or replacement) on what they sell. Historically, about .5% are

returned. What is the journal entry to estimate the expense and when

would you record this transaction? The following period, Alan Turing

returns his phone as it doesn’t work properly. What would the journal

entry be for the returned product?

Contingent Liabilities

o Probable

o Estimable

3 courses of action:

Remote – do nothing

Probable but not Estimable, Estimable but not Probable – Disclose

Probable and Estimable – book it Dano!

Payroll – Use Textbook Pg. 560-567 of 5th edition

http://www.unclefed.com/IRS-Forms/2000/HTML/p15a15.html