week 3 E13-8 - during 2006 2 Determine the liability for...

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E 13-8 Customer deposits LO3 Diversified Semiconductors sells perishable electronic components. Some must be shipped and stored in reusable protective containers. Customers pay a deposit for each container received. The deposit is equal to the container's cost. They receive a refund when the container is returned. During 2006, deposits collected on containers shipped were $664,100. Deposits are forfeited if containers are not returned within 18 months. Containers held by customers at January 1, 2006, represented deposits of $ 458,000. In 2006, $617,613 was refunded and deposits forfeited were $27,228. Required: 1. Prepare the appropriate journal entries for the deposits received and returned
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Unformatted text preview: during 2006. 2. Determine the liability for refundable deposits to be reported on the December 31, 2006, balance sheet. Amounts in parentheses do not require a minus sign in front of them. 1. Deposits Collected Cash 664,100 Liability - refundable deposits 664,100 Containers Returned Liability - refundable deposits 617,613 Cash 617,613 Deposits Forfeited Liability - refundable deposits 27,228 Revenue - sale of containers 27,228 Cost of goods sold 27,228 Inventory of containers 27,228 2. Balance on January 1 $ 458,000 Deposits received 664,100 Deposits returned ( 617,613 ) Deposits forfeited ( 27,228 ) Balance on December 31 $ 477,259...
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This note was uploaded on 03/30/2010 for the course COB ACCY 202 taught by Professor Shapland during the Spring '10 term at University of Illinois, Urbana Champaign.

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