Question

Question 2 of 4 < > -76 = Current Attempt in Progress Splish Corporation is preparing its December 31, 2020, balance sheet. The following items may be reported as either a current or long-term liability 1. 2. On December 15, 2020, Splish declared a cash dividend of $2.20 per share to stockholders of record on December 31. The dividend is payable on January 15, 2021. Splish has issued 1,000,000 shares of common stock, of which 50,000 shares are held in treasury. At December 31, bonds payable of $101,599,000 are outstanding. The bonds pay 12% interest every September 30 and mature in installments of $25,399,750 every September 30, beginning September 30, 2021. At December 31, 2019, customer advances were $13,686,000. During 2020, Splish collected $30,897,000 of customer advances; advances of $26,671,000 should be recognized in income. 3. For each item above, indicate the dollar amounts to be reported as a current liability and as a long-term liability, if any. Reported as Current Liability 1. Dividends payable $ 2. Bonds payable (September 30, 2021 installment) Bonds payable (Other than September 30, 2021 installment) Interest payable 5 3. Customer advances

Answer 1

1	Dividends payable	$2,090,000	Current liability
2	Bonds payable (September 30,2021 installment)	$25,399,750	Current liability
	Bonds payable (Other than September 30,2021 installment) [$101,599,000 - $25,399,750]	$76,199,250	Long-term liability
	Interest payable [$101,599,000 x 12% x 3/12]	$3,047,970	Current liability
3	Customer advances	$17,912,000	Current liability

Calculations:

1	Shares issued	1,000,000
	Treasury shares	-50,000
	Shares outstanding	950,000
	x Dividend per share	$2.20
	Dividends payable	$2,090,000
2	Interest payment for 3 months [Sept 30 to Dec 31]	$3,047,970
	[$101,599,000 x 12% x 3/12]
3	Customer advances at Dec 31 2019	$13,686,000
	Customer advances During 2020	$30,897,000
	Income recognized	($26,671,000)
	Customer advances at Dec 31 2020	$17,912,000