Which included in the journal entry to record forfeiture

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Reference no: EM132695234

Problem 1: Kleer-N-Kleen Refuse Company, Inc., are a newly set up firm which specialize in clearing up space debris created by the launching of space craft and satellites. It issues to commercial customers large metalic toters with powerful suction capabilities. It requires its customers to deposit $4,000 for each toter used for trash collection and charges this amount when delivered. Upon the toters being returned, the amount is refunded. If a customer cancels the trash collection contract, but fails to return the toter, the deposited is forfeited by the customer. The firm began the current year with existing customers and added new customers during the year. customers cancelled their contracts and returned the toters which had been issued to them. Onthe company held trash collection contracts. The remaining contracts represented the toters not returned by customers cancelling their respective contracts. Which of the following would be included in the journal entry to record the forfeiture of the deposits?

a. to Deposit Liability - $56,000

b. to Deposit Liability - $160,000

c. to Deposit Liability - $76,000

d. to Deposit Liability - $340,000

e. None of the above answers.

Reference no: EM132695234

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