Question

E9-23A. (Learning Objectives 1,5: Reporting current and long-term liabilities) Assume that Boni Electronics completed these selected transactions during June 20X0: a. Sales of $2,400,000 are subject to estimated warranty cost of $168,000. The provision for warranty repairs at the beginning of the year was $35,000, and warranty payments for the year totaled $52,000. b. On June 1, Boni Electronics signed a $56,000 note payable that requires annual pay- ments of $14,000 plus 6% interest on the unpaid balance each June 2. c. Music For You, Inc., a chain of music stores, ordered $135,000 worth of CD players. With its order, Music For You, Inc., sent a check for $135,000 in advance, and Boni shipped $75,000 of the goods. Boni will ship the remainder of the goods on July 3, 20X0. d. The June payroll of $270,000 is subject to employee withheld income tax of $33,000 and payroll tax of 7.65%. On June 30, Boni pays employees their take-home pay and accrues all tax amounts. Requirement 1. Report these items on Boni Electronics' Balance Sheet at June 30, 20X0.

Answer 1

Boni Electronics' Balance Sheet as on June 30, 20X0.

Sources of Funds -

Capital Employed 2053720*

Provision for Warranty Cost 151000

Advance from Music For You 60000

Note Payable 56000

Interest accrued 280

Income Tax Withheld 33000

Payroll Tax 20655

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Total 2374655

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Application of Funds -

Cash & Bank Balance 2374655

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Total 2374655

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Working Notes -

1. Cash A/c

Opening Cash 0

Sales 2400000

Note Payable 56000

Proceeds received from Music For You 135000

Net Salary Paid (216345)

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Closing Balance 2374655

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Note - Asterisk Mark (*) represents Balancing Figure(s).