Reference no: EM133085785
Question - Server Planet operates a web hosting company. Examine the following items for the fiscal year 2022 and answer the questions that follow. Record your answers in Blackboard.
The beginning of year accounts payable was $100,000. Purchases on trade accounts during the year were $650,000, and payments on account were $610,000.
The company incurs substantial costs for electricity to run its servers and air conditioning systems. As of December 31, 2022, it is estimated that $55,000 of electricity has been used, although the monthly billing for December has not yet been received.
Server Planet sells web hosting plans for as low as $25 per month. However, it requires its customers to prepay in 6-month increments. As of the end of the year, $375,000 had been collected for 2023 web hosting plans.
Web hosting services are subject to sales taxes, and Server Planet collected $65,000 during the year. All of these amounts have been remitted to taxing authorities, with the exception of $5,000 that is due to be paid in January, 2022.
The company has total bank loans of $1,500,000. This debt bears interest at 6%, payable monthly. As of December 31, 2022, all interest had been paid, with the exception of accrued interest for the last half of December.
The company's bank loans ($1,500,000) are all due on June 30, 2023. However, Server Planet has a firm lending agreement with the bank to renew and extend $1,000,000 of this amount on a 5-year basis. The company intends to exercise this renewal option, but is not yet sure about the final disposition of the remainder.
1. What is the balance in Accounts Payable at the end of the year as of December 31, 2022?
2. What is the balance in Utilities Payable as of December 31, 2022?
3. What is the balance in Unearned Revenue as of December 31, 2022?
4. What is the balance in Sales Tax Payable as of December 31, 2022?
5. What is the balance in Interest Payable as of December 31, 2022?
6. What is the Current Portion of Loan Payable as of December 31, 2022?