current liabilities - terrytube.net
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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