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Compute the amount of sales taxes payable

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Reference no: EM132610964

Question - Harris Pilton requires your assistance in handling a few accounting issues.

Harris Pilton borrowed $15,000 on a 90-day, 5% note payable on October 19th, 2020.

Harris Pilton sold inventory for a sales revenue of $12,000 on July 10th, 2020, which included a 3% sales tax and a 6-month service-type warranty. The firm did not segregate its sales revenue from its sales taxes payable. Further, the firm estimates that 2% of sales are usually defective. On September 1, 2020, a customer returned a defective inventory item costing $60.  

Instructions -

1- Compute the amount of interest that must be accrued at December 31, 2020.

2- Compute the amount of sales taxes payable that must be recorded at December 31, 2020.

3- Compute the value of the estimated warranty liability at December 31, 2020.

 

Reference no: EM132610964

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